Lowell Inc. has $5 million in inventory, $2 million in accounts receivable, and 1.5 million in accounts payables. Its annual sales are $36.5 million and annual cost of goods sold (purcahses) is $18.25million. What is the length of the company's cash conversion cyle?60 days90 days80 days70 days

Cash conversion cycle is an important financial ratio. This ratio shows the amount of time that a…

Answered: Lowell Inc.has $5 million in inventory,…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Similar questions

For the cash flow revenues shown below, find the value of G that makes the equivalent annual worth in years 1 through 7 equal to $500. The interest rate is 6.00% per year. (Round the final answer to three decimal places.) Cash flow, $ Year 0 1 2 3 The value of G is $ 225.0 225.0+ G 225.0+2G Year 4 5 16 Cash flow, $ 225.0+36 225.0+4G 225.0+5G 225.0+66
pm.6
Net Credit Sales = 12,000. Accounts receivable turnover = 18.8 times. Cost of goods sold = 2,000. Days in Year = 365 days. How much is average collection period in days?
Provide correct solution
V company's evaluation of its cash outlay required indicates that it needs P50,000 for the year. The marketable securities earn an annual rate of 2%. The company incurs P5 to convert marketable securities to cash. V company maintains buffer cash of 5,000 all throughout the year. 1. How much is the annual holding cost as a result of keeping cash in bank? 2. How much is the total annual cost of cash?
Average account receivables-60 days, Inventories-85 days, Average account payable-55 days Company spends Rs.21, 00,000 annually and can earn 10% on its investments. (i) Find out cash cycle and cash turnover assuming 360 days in a year, (ii) Minimum amount of cash required to meet the payment. Also calculate the above, if inventory age is reduced to 75 days. What will be the savings for the company?
The following information is an extract of the statement of profit or loss of Palladium Ltd for the current financial year: The average accounts receivable collection period is 45 days. The average payment supplier period is 50 days and the cash conversion cycle has been calculated as 55 days. REQUIRED: Annual sales (20% cash) R625 000 Cost of Sales R125 000 Purchases (50% on credit) R200 000 Calculate the total average investment in the cash conversion cycle (CCC) for Palladium Ltd.Assume that there are 365 days in a year.Round to the nearest Rand.
Watts 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?
None
Average daily sales of Chase Pumping Goods are Rs. 100,000. Average accounts receivable of Chase has Rs. 2 million and in inventory Rs.5 million. The company’s payables deferral period is 30 days. What is the length of the company’s cash conversion cycle?
A firm has sales of $1.4 million, and 10 percent of the sales are for cash. The year-end accounts receivable balance is $205,000. What is the average collection period? (Use 365 days in a year. Do not round intermediate calculation. Round the final answer to the 1 decimal place.) Average collection period days 76thjbnn
Berry Manufacturing turns over its inventory 8 times each year, has an Average Payment Period of 35 days and has an Average Collection Period of 60 days. The firm’s annual sales are $3.5 million. Assume there is no difference in the investment per dollar of sales in inventory, receivable, and payables and that there is a 365-day year. A. Calculate the Firm’s Operating Cycle. B. Calculate the Firm’s Cash Conversion Cycle. C. Calculate the Firm’s Daily Cash Operating Expenditure.

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