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Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Heritage Farms has sales of $1.62 million with costs of goods sold equal to 78 percent of sales. The average inventory is $369,000, accounts payable average $438,000, and receivables average $147,000. How long is the cash conversion cycle?
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- Your consulting firm was recently hired to improve the performance of RP Inc, which is highly profitable but has been experiencing cash shortages due to its high growth rate. As one part of your analysis. you want to determine the firm's cash conversion cycle. Using the following information and a 365-day year, what is the firm's present cash conversion cycle? Average inventory Annual sales Annual cost of goods seld Average accounts receivable Average accunts payable P5.000 P00.000 PH0,000 P0,000 F5000 140.6 days 120.6 days 133.6 days 148.0 days O 126.9 daysarrow_forwardConsidering the following information, calculate the cash conversion cycle. There are 365 days in a year. A/R $ 25,000 Inventories $ 50,000 A/P $ 30,000 Accruals $ 10,000 Bank Loan $ 45,000 Net Sales $ 500,000 COGS $ 200,000 36.5 days. 73 days. 18.25 days. 91.25 days. -73 days. -45 days.arrow_forwardYou have recently been hired to improve the performance of Multiplex Corporation, which has been experiencing a severe cash shortage. As one part of your analysis, you want to determine the firm’s cash conversion cycle. Using the following information and a 365-day year,(a) what is your estimate of the firm’s current cash conversion cycle? Current inventory = $241,000.00 • Annual sales = $1,200,000.00 • Accounts receivable = $300,000.00 • Accounts payable = $245,000.00 • Total annual purchases = $600,000.00 • Purchases credit terms: net 30 days. • Receivables credit terms: net 50 days.arrow_forward
- Dreamz Unlimited INC has accounts payable days of 30 , inventory days of 60 , and accounts receivable days of 35 . What is its Cash conversion cycle?arrow_forwardLibscomb Technologies' annual sales are $6,750,624 and all sales are made on credit, it purchases $3,062,806 of materials each year (and this is its cost of goods sold). Libscomb also has $571,915 of inventory, $1,475,000 of accounts receivable, and $1,400,000 of accounts payable. Assume a 365 day year. What is Libscomb’s Receivables Period (in days)?arrow_forwardSam & Sons management estimates that it takes the company 34 days on average to pay its suppliers. Management also knows that the company has days’ sales in inventory of 57 days and days’ sales outstanding of 35 days. How does Sam & Sons' cash conversion cycle compare with the industry average of 69 days? Sam & Sons' cash conversion cycle is_____ days Cash conversion cycle is (?) the industry average. The firm is (?) than other firms in the industry in managing its working capital.arrow_forward
- Suppose that LilyMac Photography has annual sales of $233,000, cost of goods sold of $168,000, average inventories of $4,800, average accounts receivable of $25,600, and an average accounts payable balance of $7,300.Assuming that all of LilyMac’s sales are on credit, what will be the firm’s cash cycle? (Use 365 days a year. Do not round intermediate calculations. Round your final answer to 2 decimal places.)arrow_forwardStratosphere Wireless is examining its cash conversion cycle. The company expects its cost of goods sold, which equals 60 percent of sales, to be $144,000 this year. Stratosphere normally turns over inventory 24 times per year, accounts receivable is turned over 12 times per year, and the accounts payable turnover is 45. Assume there are 360 days in a year. Calculate the cash conversion cycle. Round your answer to the nearest whole number. days Calculate the average balances in accounts receivable, accounts payable, and inventory. Round your answers to the nearest dollar. Accounts receivable: $ Accounts payable: $ Inventory: $arrow_forwardWatts Industries' carries 87 days in Inventory, and collects its Accounts Receivable in 75 days. If the firm pays its Accounts Payable in 26 days, what is Watts' Cash Conversion Cycle?arrow_forward
- The present value of cash flow A is $430 and the present value of cash flow B is $220. Find the present value of the combined cash if the discount rate is 5%.arrow_forwardAn arithmetic cash flow gradient series equals $450 in year 1, $550 in year 2, and amounts increasing by $100 per year through year 12. At i= 9% per year, determine the present worth of the cash flow series in year 0. The present worth of the cash flow series in year O is $ 944.15arrow_forwardSkylark Industries has P6,000,000 in inventory and P3,000,000 in accounts receivable. The company has an average daily sales of P100,000. The company’s payables deferral period is 30 days. Compute for the cash conversion cycle. * A.100 days B. 60 days C. 50 days D. 40 days E. 33 daysarrow_forward
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