Define the concept of cash conversion cycle and what is the difference between the operating cycle and conversion cycle?

Q: How do you calculate Fixed Asset Turnover? What is the Free Cash Flow Ratio? What is the difference…

A: The answers for the questions on accounting ratios are discussed hereunder : Fixed Assets turn over…

Q: Identify the cash flow series associated with production or service over thelife of the asset?

A: Definition: Cash inflows: The amount of cash received by a company from the operating, investing,…

Q: What is Internal Rate of Return - Variable Cash Flows with Reversion?  Please provide examples.

A: The internal rate of return is the one of the discounted techniques of capital budgeting which is…

Q: What are the two fundamental approaches to Probabilistic Cash Flow Analysis? What are its benefits?

A: The two fundamental approaches to the probabilistic cash flow analysis is shown as follows: Cash…

Q: Describe the Replacement Analysis Using the Cash-Flow approach?

A: The cash flow approach clearly reflects the real cash-flow effects for each replacement option as it…

Q: What is conversion cycle?

A: The conversion cycle is one of the four transaction cycles used by accounting systems that record…

Q: Define the following terms: inventory conversion period, average collection period, and payables…

A: All the transactions of the company that are happened during the year will be recorded first in the…

Q: What is the cash conversion cycle? What is its equation?

A: The CCC tells firms that in how many days’ firms will realize its cash from its operations. It is a…

Q: What is the present value of the combined cash flows?

A: Present Value: It represents the present value of the future cash flow stream.  It is computed by…

Q: What is the maturity period required for an investment to qualify under the definitions of a cash…

A: Cash and cash equivalents correspond to just the line item on the balance sheet that lists the value…

Q: How would a reduction in the cash conversion cycle increase profitability?

A: Cash conversion cycle (CCC): It is a metric that speaks to the time it takes for a business…

Q: Where is the short term investment shown in the Cash flow statement?

A: A short-term investment: It also known as a temporary investment or marketable security. It is a…

Q: Explain the following terms: incremental cash flow, sunk cost, opportunity cost,externality, and…

A: Incremental cash flow: Incremental cash flow is the extra functioning cash flow that an association…

Q: What is normal cash flow project?

A: Cash flow refers to the amount of cash that the company receives from investing into a project.…

Q: What is cash conversion cycle and how is it different from operating cycle?

A: Cash conversion cycle: It is a way that helps a company to determine how much it requires to convert…

Q: When using the NPV method for a particular investment decision, if the present value of all cash…

A: When NPV method is used the investment is measured on three scenarios Positive NPV Where the…

Q: In calculating any cash flow equivalence, what do we need to identify?

A: Cash equivalence helps investors to check the real worth of the funds. The investor will prefer…

Q: Which of the following methods consider the time value of money? A. payback and accounting rate of…

A: Time Value of Money The time value of money is the concept that money you have now is worth more…

Q: What is the significance of the FCF (Free Cash Flow) in the area of valuation?

A: Cash flows refer to the cash expenditure and cash receipt of the business over a specific time…

Q: Explain the cash conversion cycle, its funding requirements, and the key strategies for managing it.

A: The cash conversion cycle will be reflective of a liquidity metric which will be helpful in…

Q: On what does the interest paid on a cash investment depend?

A: Cash investment An investment (short-term) under which one makes a deposit the cash and also…

Q: What role do incremental cash flows play in a replacement analysis?

A: Answer: Introduction: Replacement analysis is one of the key analyses in the concept of capital…

Q: Describe the Investment-Credit Decision—A Cash Flow Perspective.

A: Answer: Every lender and borrower shall have their own conditions based on their needs and wishes.…

Q: How are incremental cash flows found in a replacement analysis?

A: The choice to substitute an existing asset with another is defined as the net current and internal…

Q: yback method, the Accounting Rate of Return, and Discounted Cash Flow Model (Ne

A: Step 1 A huge budget is a method through which a company assesses possible substantial projects or…

Q: What should a firm’s goal be regarding the cash conversion cycle,holding other things constant?…

A: The cash conversion cycle refers to the number of days between paying for crude materials or…

Q: What do we mean by the cash conversion cycle? Explain how it works

A: Cash Conversion Cycle is used to measure the time it takes an organization to convert it's resources…

Q: The net present value of an investment represents the difference between the: present value of cash…

A: To determine the value of NPV, NPV is the difference between the present values of future cash flows…

Q: What does the operating cycle and the cash conversion cycle tell the financial analyst and how does…

A: Financial analysts use different types of ratios and financial data in order to assess the…

Q: Calculate the present value and future value of an uneven cash flow stream.

A: A stream of cash flow is uneven  when all the amounts in the series of cash flows are unequal .i.e.,…

Q: What is free cash flow valuation model?

A: Free cash flow (FCF) is the amount of money available to an organization at their complete disposal,…

Q: e following methods of capital budgeting tries to equate the present value of cash inflows to…

A: Present value refers to the current valuation for a future sum. Investors determine the present…

Q: What are some actions a firm can take to shorten its cash conversion cycle?

A: The cash conversion cycle is the time period between the out flow of cash for purchasing raw…

Q: What are the best startegy for flactuating cash flow?

A: The movement of funds into or out of a business is referred to as cash flow.Inflows are represented…

Q: Explain how sunk costs and cannibalisation affect the determination of an investment’s incremental…

A: Introduction : . Simply put, sunk costs refers to the costs that has already been incurred and the…

Q: What should a firm’s goal be regarding the cash conversion cycle?  Explain

A: The cash conversion cycle measures the number of days between the company making a deposit to buy…

Q: Explain what is meant by cash management and the cash conversion cycle and calculate the effective…

A: cash is considered to be the one of the important aspect of the management. management of cash plays…

Q: Define “incremental cash flow.”

A: An incremental cash flow is the additional operating cash flow that an organization receives from…

Q: Illustrate the concept of present-worth analysis based on cash flowequivalence along with the…

A: The concept of present-worth analysis based on cash flow equivalence along with the payback period.…