The Lux Co. has an inventory conversion period of 60 days, a receivable conversion period of 35 days, and a payable payment period of 45 days. The Lux Co.’s variable cost ratio is 65% and annual fixed costs of P600,000. The current cost of capital for National Co. is 12%.If Lux Co.’s annual sales are P3,375,000 and all sales are on credit, what is the firm’s carrying cost on accounts receivable, using 360 days year?
The Lux Co. has an inventory conversion period of 60 days, a receivable conversion period of 35 days, and a payable payment period of 45 days. The Lux Co.’s variable cost ratio is 65% and annual fixed costs of P600,000. The current cost of capital for National Co. is 12%.If Lux Co.’s annual sales are P3,375,000 and all sales are on credit, what is the firm’s carrying cost on accounts receivable, using 360 days year?
Chapter16: Supply Chains And Working Capital Management
Section: Chapter Questions
Problem 11P
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The Lux Co. has an inventory conversion period of 60 days, a receivable conversion period of 35 days, and a payable payment period of 45 days. The Lux Co.’s variable cost ratio is 65% and annual fixed costs of P600,000. The current cost of capital for National Co. is 12%.If Lux Co.’s annual sales are P3,375,000 and all sales are on credit, what is the firm’s carrying cost on
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