CASH CONVERSION CYCLE Primrose Corp has $15million of sales, $2million of inventories, $3 million of receivables, and $1 million of payables. Its cost of goods sold is 80% of sales, and it finances working capital with bank loans at an 8% rate. What is Primrose’s cash conversion cycle (CCC)? If Primrose could lower its inventories and receivables by 10% each and increase its payables by 10%, all without affecting sales or cost of goods sold, what would be the new CCC, how much cash would be freed up, and how would that affect pretax profits?
Q: If answered within 30mins,it would be helpful!
A: The inventory cost per unit is calculated below, Inventory cost per unit = Cost or market value, whi...
Q: 4. What amount of total Accumulated Profits will be reported in the Consolidated Statement of financ...
A: Given, On 31.03.2019, Plex corporation acquired 80% of Slex corporation Cost of acquisition = P2600...
Q: A company acquired patent right on July 1, 2018 for P2,000,000. The asset has a legal life of 15 ye...
A: A company acquired patent right on July 1, 2018, for P2,000,000. The asset has a legal life of 15 y...
Q: ABC corporation produces plastic bottles. Details of cost are given below: Standard unit quantity pe...
A: Material price variance: It can be defined as the difference between the actual and budgeted costs i...
Q: Assume the Hiking Shoes division of the All About Shoes Corporation had the following results last y...
A: Sale margin means the percentage of profit on sales i.e. how much percentage of sale is our profits....
Q: Classify each of the following accounts as an asset (A), liability (L), or equity (EQ) account. Prep...
A: Prepaid rent is the advance rent paid for the future period.
Q: XXX Company sells products Laptop, Desktop and Tablet. In 2020 the unit sales price, variable costs,...
A: Step 1 Break-even analysis is useful in determining the level of production or a targeted desired sa...
Q: 4.Internal service fund activities are: A. not allowed to be reported as part of businessOtype activ...
A:
Q: What are the situs rules on income tax situs on sales of goods?
A: Income tax:A tax charged on the income earned by the individual or corporates by the central governm...
Q: Sheldon, Inc. declared a stock dividend of 50,000 shares on a date when the company's common stoc...
A: Stock dividend is a method of capitalizing the retained earning. Under this, no profit is distribute...
Q: Livingston Company sells merchandise on account for $6,000 to Briggs Inc. on April 10 with credit te...
A: We have the following information: Livingston Company sells merchandise on account for $6,000 to Br...
Q: The maturity value of a 12%, 60-day note for $5,000 is $5,600. Please explain your answer with expla...
A: Face value of the note $5,000 Interest rate 12% Maturity period 60 days
Q: A deduction allowed to wholesalers and retailers from the price of merchandise listed in catalogs is...
A: A deduction allowed to wholesalers and retailers from the price of merchandise listed in catalogs is...
Q: what is posting system in detail ?
A: Accounting is a tool of recording, summarising and analysing the financial transactions and events i...
Q: Compute the maturity value as indicated for each of the following notes receivable. A. A $9,000, 6%,...
A: Note receivable is said to be a written promise from a customer to pay a specific amount on a specif...
Q: The following information is available for Cullumber Company for three recent fiscal years. ...
A: Inventory Turnover Ratio: Inventory Turnover Ratio shows how effectively inventory is managed by com...
Q: E1-25A how do I construct a balance sheet
A: Balance Sheet is known as the statement of financial position of the company. It is usually prepared...
Q: Which responsibility center's manager would be most concerned about the segment's return on investme...
A: Revenue Center:- It is a center that is mainly responsible for generating revenue from sales. The Ma...
Q: The board of directors of Yancey Company declared a cash dividend of $1.50 per share on 42,000 share...
A: Dividend distribution is a method of distributing profit among the stockholder of the organization. ...
Q: Giant Ltd acquired s0 percent share capital of Expert Ltd. On 1 July 2018 for a cost of $1,600,000. ...
A: The following computations are done for Giant Ltd to show the acquisition of Expert Limited.
Q: what are the key features of a POS system
A:
Q: Three items are missing in each of the following columns ano are identified by letter. Sales revenue...
A: Sales=Net sales+Sales discounts+Sales returns and allowances=$15,000+$10,000+$440,000=$465,000 b) Co...
Q: Nest corporation issued 5-year, 5% bonds having a par value of $100,000. The company received procee...
A: Bond: It refers to a financial instrument that reflects an acknowledgement of debt and states a fixe...
Q: Selected accounts from the ledger of McDaniel Corporation appear below. For each account, indicate t...
A: We have the following information: Asset = A Liabilities = L Expenses = E Revenue = R None of the ...
Q: A ten-year promissory note dated April 1, 2001, with a face value of $4700.00 bearing interest at 7....
A: Definition: The promissory note is a written instrument that holds a promise to pay. One party gives...
Q: Zahra's Decoratives produces and sells a decorative pillow for $100 per unit. In the first month of ...
A: Introduction: Absorption costing: Its also called as Full costing method. For calculating product co...
Q: Presented below is the trial balance of Muscat Corporation on December 31, 2019 Accounts Debit...
A: Current liabilities: Liabilities which have to be paid within one year or one operating cycle, whic...
Q: Sheldon, Inc. declared a stock dividend of 100,000 shares on a date when the company's common stoc...
A: Introduction: Dividend: Its given to the share holders as a return on their investments with the com...
Q: 0) A large project usually involves a large number of activities Management need some way to determi...
A: Work breakdown structure: It is a structure which gives the outline of a project going to be done. I...
Q: REAL OPTIONS Boisjoly Enterprises is considering buying a vacant lot that sells for $ 1.4 million. I...
A: Since you have posted a question with multipule sub parts , we will solve first three subparts for y...
Q: Goodwill could be expensed in one of the following countries: Select one: O a. United Kingdom O b. F...
A: Goodwill can be referred to as the amount of the value of the company which exceeds the assets less ...
Q: 1. The financial year of Shah Enterprise ended on 31 December 2019. Show the ledger account for the ...
A: Ledgers are the records prepared in books of accounts showing the accounts which gets affected with ...
Q: Reign Inc. produces special machines made to customer specifications. The following data pertain to ...
A: 1.Computation of gross profit of the order:
Q: What would happen if an investor, did not take depreciation deductions for their property and after ...
A: It is the gain that occurs when the sale of a depreciable capital asset is made provided, such gain ...
Q: Data related to a bond issued by Roxon enterprises is given below: $800,000 Interest expense on bond...
A: Bonds: These are the financial instruments issued by a company to the general public for raising fun...
Q: Data related to a bond issued by Roxon enterprises is given below: Interest expense on bond Increase...
A: Cash Paid for expenses is a technique of recording and calculating cash outflows in direct format of...
Q: 11. When using the indirect method to prepare the operating section of a statement of cash flows, wh...
A: Statement of cash flows is prepared to analyze the cash inflow and outflow during a particular perio...
Q: Subject: Valuation Methods Type of Activity: Short-Essay, Brief Explanation/discussion. Note: You ca...
A: Common errors in Valuing Intangible Asset: An Intangible Asset Valuation is Used for the Wrong Purp...
Q: Huron Company produces a commercial cleaning compound known as Zoom. The direct materialsand direct ...
A: Standard costing: Under this costing method, the expected costs are used in the accounting records i...
Q: If fixed costs are $450,000, the unit selling price is $75, and the unit variable costs are $50, wha...
A: Break-Even Sales:-It is the sales which a business earns with zero profit margin. Here the company o...
Q: Question 1) You took 100.000 TL car loan from a bank. You will repay the loan to the bank in 4 years...
A: “Since you have asked multiple question, we will solve the first question for you. If you want any s...
Q: ABC company accumulated the following cost in Department B During the Month of November: 田 Cost Tran...
A: Assuming material and conversion costs have same degree of completion Cost per unit for current co...
Q: Chapter : Adjustments for Prepayments and Accruals 1. The financial year of Shah Enterprise ended on...
A: Prepayments include prepaid expenses that are not yet incurred or unearned income received in advanc...
Q: Is default risk premium likely to be pro-cyclical (i.e., increasing during economic expansion) or co...
A: The difference between the company's actual interest rate and risk free rate within the industry is ...
Q: CHAPTER 18 Financial Analysis: The Big Picture Exercises Instructions Prepare a statement of compreh...
A: Horizontal analysis: means the study of segments in a horizontal way to do interpretation and analys...
CASH CONVERSION CYCLE Primrose Corp has $15million of sales, $2million of inventories, $3 million of receivables, and $1 million of payables. Its cost of goods sold is 80% of sales, and it finances working capital with bank loans at an 8% rate. What is Primrose’s cash conversion cycle (CCC)? If Primrose could lower its inventories and receivables by 10% each and increase its payables by 10%, all without affecting sales or cost of goods sold, what would be the new CCC, how much cash would be freed up, and how would that affect pretax profits?
Step by step
Solved in 3 steps with 6 images
- Rosanna Corp. has P15million of sales; P2million of inventories; P3million of receivables and P1million of payable. Its cost of sales is 80% of sales, and it finance working capital with bank loans at an 8% rate. What is Rosanna’s cash conversion cycle? If Rosanna could lower its inventories and receivables by 10% each, and increase its payable by 10%, all without affecting sales or cost of sales, what would be the new Cash conversion cycle? Following number 2 above, how much cash would be freed up?Parramore Corp has $12 million of sales, $3 million of inventories,$3.25 million of receivables, and $1.25 million of payables. Its cost of goods sold is 75% of sales,and it finances working capital with bank loans at an 8% rate. What is Parramore’s cash conversioncycle (CCC)? If Parramore could lower its inventories and receivables by 10% each andincrease its payables by 10%, all without affecting sales or cost of goods sold, what would bethe new CCC, how much cash would be freed up, and how would that affect pretax profits?Parramore Corp has $10 million of sales, $2 million of inventories, $4 million of receivables, and $3 million of payables. Its cost of goods sold is 75% of sales, and it finances working capital with bank loans at a 7% rate. Assume 365 days in year for your calculations. A. What is Parramore's cash conversion cycle (CCC)? Do not round intermediate calculations. Round your answer to two decimal places. days B. If Parramore could lower its inventories and receivables by 12% each and increase its payables by 12%, all without affecting sales or cost of goods sold, what would be the new CCC? Do not round intermediate calculations. Round your answer to two decimal places. days C. How much cash would be freed up, if Parramore could lower its inventories and receivables by 12% each and increase its payables by 12%, all without affecting sales or cost of goods sold? Write out your answer completely. For Example, 13.2 million should be entered as 13,200,000. Do not round intermediate…
- PROBLEM The Sandbox's Company has cash needs of P5 million per month. If Sandbox needs more cash, it can sell marketable securities, incurring a fee of P300 for each transaction. If Sandbox leaves its funds in marketable securities, it expects to earn approximately 0.50% per month on their investment. 4. If Sandbox gets a cash infusion of P1 million each time it needs cash, what are the total costs per month associated its cash infusions? Use a number, no decimal value no currency, no space, no commas * 5. If Sandbox gets a cash infusion of P1 million each time it needs cash, how many transactions would be associated with its cash investment? Use a number, no decimal value no currency, no space, no commas * 6. Using the Baumol model, what level of cash infusion minimizes Sandbox’s costs associated with cash? Use a number, no decimal value no currency, no space, no commas. * 7. If Sandbox gets a cash infusion of P1 million each time it needs cash, what are the transactions costs per…Parramore Corp has $18 million of sales, $2 million of inventories, $3.5 million of receivables, and $2.5 million of payables. Its cost of goods sold is 80% of sales, and it finances working capital with bank loans at an 8% rate. Assume 365 days in year for your calculations. What is Parramore's cash conversion cycle (CCC)? Do not round intermediate calculations. Round your answer to two decimal places. days If Parramore could lower its inventories and receivables by 9% each and increase its payables by 9%, all without affecting sales or cost of goods sold, what would be the new CCC? Do not round intermediate calculations. Round your answer to two decimal places. days How much cash would be freed up, if Parramore could lower its inventories and receivables by 9% each and increase its payables by 9%, all without affecting sales or cost of goods sold? Write out your answer completely. For Example, 13.2 million should be entered as 13,200,000. Do not round intermediate…Problem The Sandbox's Company has cash needs of P5 million per month. If Sandbox needs more cash, it can sell marketable securities, incurring a fee of P300 for each transaction. If Sandbox leaves its funds in marketable securities, it expects to earn approximately 0.50% per month on their investment. 1. Using the Baumol model, what level of cash infusion minimizes Sandbox’s costs associated with cash? Use a number, no decimal value no currency, no space, no commas. * 2. If Sandbox gets a cash infusion of P1 million each time it needs cash, what are the total costs per month associated its cash infusions? Use a number, no decimal value no currency, no space, no commas * please answer all questions. Thanks!
- PROBLEM Buccaneer, Inc., has determined that it needs $10 million in cash per week. If Buccaneer needs additional cash, it can sell marketable securities, incurring a fee of $100 for each transaction. If Buccaneer leaves funds in its marketable securities, it expects to earn approximately 0.2% per week on their investment. 1. How much is the weekly opportunity cost of cash? (Use a number, must be in decimal form. eg. 6.3%/100, encode 0.063 , no commas, no currency, no space) * 2. How much is the total demand for cash per week? (Use a number, no decimal value, no commas, no currency, no space) * 3. How much is the cost per transaction? (Use a number, no decimal value, no commas, no currency, no space) * 4. Using the Baumol Model, how much cash should Buccaneer raise from selling securities each week to minimize its costs of cash? (Use a number, no decimal value, no commas, no currency, no space) * PLEASE ANSWER ALL QUESTIONS. THANK YOUCash conversion cycle American Products is concerned about managing cash effi-ciently. On average, inventories have an age of 80 days, and accounts receivable are collected in 40 days. Accounts payable are paid approximately 30 days after they arise. The firm has annual sales of about $30 million. Goods sold total $20 million, and purchases are $15 million. c. Calculate the amount of resources needed to support the firm’s cash conversion cycle?Problem The Sandbox's Company has cash needs of P5 million per month. If Sandbox needs more cash, it can sell marketable securities, incurring a fee of P300 for each transaction. If Sandbox leaves its funds in marketable securities, it expects to earn approximately 0.50% per month on their investment. 1. If Sandbox gets a cash infusion of P1 million each time it needs cash, what are the transactions costs per month associated its cash infusions? Use a number, no decimal value no currency, no space, no commas * PLEASE ANSWER THANKS!
- C. Exodus Corp. is analyzing the performance of its cash management. On the average, the firm holds inventory 65 days, pays its suppliers in 35 days, and collects its receivables in 15 days. The firm has a current annual outlay of P1,960,000 on operating cycle investments. Exodus currently pays 10 percent for its negotiated financing. (Assume a 360-day year.) Calculate the following: a. Cash conversion cycle b. Operating cycle. c. Daily expenditure and the firm's annual savings if the operating cycle is reduced by 15 days.Explain Step By Step Q1: Aztec Products wishes to evaluate its cash conversion cycle (CCC). Research by one of the firm’s financial analysts indicates that on average the firm holds items in inventory for 65 days, pays its suppliers 35 days after purchase, and collects its receivables after 55 days. The firm’s annual sales (all on credit) are about $2.1 billion, its cost of goods sold represent about 67 percent of sales, and purchases represent about 40 percent of cost of goods sold. Assume a 365-day year. A) If Dean Muhammad Suppliers receive an invoice for purchases dated 12/12/2002 subject to credit terms of "2/10, net 30", what is the last possible day the discount can be taken? January 11 January 22 January 30 December 22Q1: Aztec Products wishes to evaluate its cash conversion cycle (CCC). Research by one of the firm’s financial analysts indicates that on average the firm holds items in inventory for 65 days, pays its suppliers 35 days after purchase, and collects its receivables after 55 days. The firm’s annual sales (all on credit) are about $2.1 billion, its cost of goods sold represent about 67 percent of sales, and purchases represent about 40 percent of cost of goods sold. Assume a 365-day year. a. What is Aztec Products’ operating cycle (OC) and cash conversion (CCC)?