The Hedge Company has an average age of inventory of 65 days, an average collection period of 60 days and an average payment period of 65 days. The firm's total annual outlays for operating cycle investments are R3.65 million. Assuming a 365-day year, how much negotiated financing is required to support it cash conversion cycle?

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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The Hedge Company has an average age of inventory of 65 days, an average collection period of 60 days and an average payment period of 65 days. The firm's total annual outlays for operating cycle investments are R3.65 million. Assuming a 365-day year, how much negotiated financing is required to support it cash conversion cycle?

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