A firm with a cash conversion cycle of 40 days can stretch its average payment period from 15 days to 20 days. This will result in a/an... Oa. decrease of 20 days in the cash conversion cycle. b. decrease of 5 days in the cash conversion cycle. increase of 5 days in the cash conversion cycle. * d. increase of 20 days in the cash conversion cycle. C.

A firm with a cash conversion cycle of 40 days can stretch its average payment period from 15 days to 20 days. This will result in a/an... Oa. decrease of 20 days in the cash conversion cycle. b. decrease of 5 days in the cash conversion cycle. increase of 5 days in the cash conversion cycle. * d. increase of 20 days in the cash conversion cycle. C.

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter21: Supply Chains And Working Capital Management

Section: Chapter Questions

Problem 11P: Negus Enterprises has an inventory conversion period of 50 days, an average collection period of 35...

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Assume that an investment of 100,000 produces a net cash flow of 60,000 per year for two years. The discount factor for year 1 is 0.89 and for year 2 is 0.80. The NPV is a. 0 b. 6,800 c. 1,400 d. (4,000)
Optimal Cash Transfer Barenbaum Industries projects that cash outlays of 4.5 million will occur uniformly throughout the year. Barenbaum plans to meet its cash requirements by periodically selling marketable securities from its portfolio. The firms marketable securities are invested to earn 12%, and the cost per transaction of converting securities to cash is 27. a. Use the Baumol model to determine the optimal transaction size for transfers from marketable securities to cash. b. What will be Barenbaums average cash balance? c. How many transfers per year will be required? d. What will be Barenbaums total annual cost of maintaining cash balances? What would the total cost be if the company maintained an average cash balance of 50,000 or of 0 (it deposits funds daily to meet cash requirements)?
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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?
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Altai, Inc has a cash conversion cycle of 175 days. The company is able to stretch its average payment period to 45 days from 30 days. The result is a/an_________ of ____ days in the cash conversion cycle.
Assume a firm has a cash cycle of 67 days and an operating cycle of 104 days.What is its average payment period?
Price Mart is considering outsourcing its billing operations. A consultant estimates that outsourcing should result in cash savings of $9,100 the first year, $15,100 for the next two years, and $18,100 for the next two years. Interest is at 10%. Assume cash flows occur at the end of the year. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: Calculate the total present value of the cash flows. (Do not round intermediate calculations. Round your final answer to nearest whole dollar.)
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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
Watts Industries' carries 87 days in Inventory, and collects its Accounts Receivable in 75 days. If the firm pays its Accounts Payable in 26 days, what is Watts' Cash Conversion Cycle?