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Q: Kamal Co. has an average collection period (ACP) of 30 days and an operating cycle of 170 days. It…
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Q: A firm has an average age of inventory of 100 days, an average collection period of 40 days, and an…
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A: GIVEN INVENTORY=P6000,000ACCOUNTS RECEIVABLES=P3000,000SALES=P100,000DPO=30 DAYS
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Q: cash conversion cycle
A: Cash conversion cycle = Age of inventory + Days sales outstanding - Accounts payable deferral period
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A: Computation:
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- A firm has an average age of inventory of 100 days, an average collection period of 40 days, and an average payment period of 30 days. The firm's cash conversion cycle is?Brothers Breads has the following data. What is the firm's cash conversion cycle? Inventory conversion period = 50 days Average collection period = 17 days Payables deferral period = 25 days a. 46 days b. 31 days c. 42 days d. 38 days e. 34 daysA business plans to use £20,000 of cash during the forthcoming year. It holds most of its cash in a deposit account from which it costs £30 to make each withdrawal and which pays interest at 10 per cent p.a. What is the optimal size for each withdrawal?
- Limitless Styles has a 45 day accounts payable period. The firm has expected sales of $900, $1,200, $1,900, and $2,600, respectively, by quarter for the next calendar year. The cost of goods sold for a quarter is equal to 70% of the next quarter sales. The firm has a beginning payables balance of $600 as of quarter one. What is the amount of the projected cash disbursements for accounts payable for Quarter 3 of the next year? Assume that a year has 360 days. A)$1,195 B)$1,085 C)$1,575Green Corporation anticipates a cash requirement of P1,000 over a 1- month period. It is expected that cash will be paid uniformly. The annual interest rate is 24 percent. The transaction cost of each borrowing or withdrawal is P30. Requirement: (a) What is the optimal cash balance? (b) What is the average cash balance?Your firm expects to receive a $20,000 payment from a supplier in 25 days. Calculate the increase in the cash inflow's present value if the cash inflow can be collected 5 days sooner. Assume an annual discount rate of 10%. A. -$56.18 b. $27.07 c. $19,9972.64 d. $18,587.25
- A firm has annual operating outlays of P1,800,000 and a cash conversion cycle of 60 days. If the firm currently pays 12 percent for negotiated financing and reduces its cash conversion cycle to 40 days, the annual savings is?An investment producing cash flows in the amount of $1,200 per month is undertaken for a period of 28 months. The investor pays $24,000 for the investment and the contract stipulates that investment returns must be reported on a basis equivalent with annual compounding. Given that theinvestment is sold after 28 months, what would be the equivalent annual compound rate of interest reported to the investor? What would be the annual rate compounded monthly for this investment?Tommy Textiles Limited estimates that it takes the company 27 days on average to pay off its suppliers. It also knows that it has days sales in inventory of 64 days and days sales outstanding of 32 days. Which of the following is Tommy's cash conversion cycle? O a. 79 days O b. 49 days O c. 59 days O d. 69 days A Financial Analyst has recommended a $100 000 portfolio containing assets X, Y and Z. $20 000 will be invested in asset X, with a beta of 1.5; $50 000 will be invested in asset Y, with a beta of 2.0; and $30 000 will be invested in asset Z, with a beta of 0.5. The beta of the portfolio is: O a. 1.25 O b. 1.45 O c. 1.55 O d. 1.15
- Leyton Lumber Company has sales of $12 million per year, all oncredit terms calling for payment within 30 days, and its accounts receivable are $1.5 million.What is Leyton’s DSO, what would it be if all customers paid on time, and how much capitalwould be released if Leyton could take action that led to on-time payments?Your firm expects to receive a $40,000 payment from a supplier in 40 days. What is the present value of this cash inflow? Assume an annual discount rate of 4%. Use simple interest.The following cash flows represent the potential annual savings associated with two different types of production processes, each of which requires an investment of $22,000: Assuming that the interest rate is 15%, complete the following tasks:(a) Determine the equivalent annual savings for each process.(b) Determine the hourly savings for each process, assuming 2,000 hours ofoperation per year.(c) Determine which process should be selected.