For the Bayer Company, the average ageof accounts receivable is 60 days, theaverage age of accounts payable is 45days, and the average age of inventory is72 days. Assuming a 365-day year, whatis the length ofof the firm's cashconversion cycle?

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Answered: For the Bayer Company, the average age…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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A cash flow series is described by the following: $10,000 + $250(t), where t is the number of compounding periods. The present worth of this series at the end of five periods, where interest is 2% per t, is nearest what value? (a) $11,250 (b) $50,620 (c) $56,432 (d) $60,620?
Zane Corporation has an inventory conversion period of 79 days, an average collection period of 43 days, and a payables deferral period of 50 days. Assume 365 days in year for your calculations. What is the length of the cash conversion cycle? Round your answer to two decimal places. days If Zane's annual sales are $3,598,365 and all sales are on credit, what is the investment in accounts receivable? Do not round intermediate calculations. Round your answer to the nearest cent. $ How many times per year does Zane turn over its inventory? Assume that the cost of goods sold is 75% of sales. Use sales in the numerator to calculate the turnover ratio. Do not round intermediate calculations. Round your answer to two decimal places. times
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If a firm has sales of $21,752,000 a year, and the average collection period for the industry is 45 days, what should this firm’s accounts receivable be if the firm is comparable to the industry? Assume there are 365 days in a year. Do not round intermediate calculations. Round your answer to the nearest dollar.
Suppose that Freddie's Fries has annual sales of $620,000; cost of goods sold of $495, 000; average inventories of $21,000; average accounts receivable of $37,000, and an average accounts payable balance of $32, 000. Assuming that all of Freddie's sales are on credit, what will be the firm's cash cycle? (Round your answer to 2 decimal places.) a. 37.26. b. 60.86. c. 1.82. d. 13.66.
Given an annual credit sales value of 365 million; accounts receivable beg. 36.5 million, cost of goods sold of 240 million, and beginning inventory of 20 million, how long is the average colelction period? (assume 365 days in a year)
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1. What is the total present value of the cash receipts X today (at time 0) if interest is 4.4% payable quarterly?2. What is the total accumulated value of the cash receipts X right after the last payment (at time 10) if interest is 4.4% payable quarterly?3. What is the total interest earned at the end of the term of this cash flow?4. How much is the cash receivable X by Rafa at the end of each quarter at the same interest charged if its net present value is 50,000?5. Ken receives Y at the end of each semiannual period over the same term at 2.5% interest payable semiannually for this cash flow. Calculate Y if its total worth today is 50,000.6. For the previous problem who earned more based on the net value of their cash receipts at the end of the term? Ken or Rafa?
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For the Bayer Company, the average age of accounts receivable is 60 days, the average age of accounts payable is 45 days, and the average age of inventory is 72 days. Assuming a 365-day year, what is the length of of the firm's cash conversion cycle?