Using 2019 values and not averages, answer the following: c) What is the purchase to payment conversion periods? d) What is the cash conversion cycle?
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Using 2019 values and not averages, answer the following:
c) What is the purchase to payment conversion periods?
d) What is the cash conversion cycle?
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- You are considering the purchase of a new machine for a project. Details of this potential purchase are provided below. • The project life is 3 years The machine costs $240,000 o You will pay cash for half of this at time 0, and will finance the remaining half at 10% APR compounded annually over 3 years. The machine will be depreciated using a 7 year MACRS approach. Annual O&M costs of the machine are $25,000. Annual labor savings (revenues) are $100,000. Salvage Value at the end of year 3 will be $90,000. Working Capital requirement is initially $50,000. Any investment in Working Capital will be recovered at the end of the project. Assume an income tax rate and gains tax rate of 21%. Your MARR is 15%. NOTE: DO THIS PROBLEM AS A CONSTANT YEAR PROBLEM (I.E. YOU DON'T NEED TO ADJUST FOR THE EFFECTS OF INFLATION) Part (a) (a)). Fill in the Income and Cash Flow tables on the next page to find the annual after-tax cash flows. Cells outlined in BOLD are grading checkpoints. These cells are…Use direct method Comparative Balance Sheets Current assets Cash at Bank Accounts Receivable Less: Allowance for doubtful debts Inventory - Javas Ultra02 Systems Total Current Assets Non-current Assets Property, Plant & Equipment Accumulated Depreciation - PPE Investment in Spy Toys Ltd Total Non-current Assets Total Assets Current Liabilities Accounts Payable Accrued Expenses Income Tax Payable Total Current Liabilities Total Liabilities Net Assets Equity Share Capital Retained Profits General Reserve Revaluation Surplus Total Equity Comparative Income Statement Income Sales Javas Sales Installation Sales Software and data. Total Income Cost of Sales Cost of Sales - Javas Ultra 02 System Gross Profit Expenses Loss on sale of PPE Bad debts expense Other expenses Depreciation Expense-PPE Income Tax Expense Total Expenses Net Profit The following additional information relating to 2021 is provided: - All sales of inventory, provision of installation, and provision of services were on…Dec. 31, 2020 Dec. 31, 2019 Assets Current assets: Cash and cash equivalents $248,005 $419,465 Accounts receivable 38,283 34,839 Inventory 15.043 15,332 Prepaid expenses and other current assets 39,965 34,795 Income tax receivable 58,152 16,488 Investments 415,199 338,592 Total current assets 814.647 859,511 Property, plant, & equipment, net 1,217.220 1,106,984 Long-term investments 622,939 496.106 Other assets 70,260 64,716 Total assets $2,725,066 $2,527,317 Liabilities and Shareholders' Equity Current liabilities: Accounts payable $85,709 $69,613 Accrued payroll and benefits 64,958 73,894 Accrued liabilities 129,275 102,203 Total current liabilities 279,942 245,710 Deferred liabilities 284.267 240,975 Other liabilities 32.883 28,263 Total liabilities 597,092 514,948 Shareholders' equity: Common stock 358 354 Additional paid-in capital 954,988 861.843 Retained earnings 1,172.628 1,150,172 Total shareholders' equity 2,127,974 2,012.369 Total liabilities and shareholders' equity…
- Classifying Items in the Statement of Cash Flows The following items are commonly reported in a statement of cash flows (indirect method presentation). For each item 1 through 20, determine (a) in which section the item is presented (operating, investing, or financing) and (b) whether the associated dollar amount is added or subtracted in the statement. (a) (b) 1. Payments of short-term debt. AnswerOperatingInvestingFinancing AnswerAddSubtract 2. Repurchases of common stock. AnswerOperatingInvestingFinancing AnswerAddSubtract 3. Purchases of property and equipment. AnswerOperatingInvestingFinancing AnswerAddSubtract 4. Sale of investments classified as long-term. AnswerOperatingInvestingFinancing AnswerAddSubtract 5. Proceeds from the issuance of common stock. AnswerOperatingInvestingFinancing AnswerAddSubtract 6. Increase in prepaid expenses and other current assets. AnswerOperatingInvestingFinancing AnswerAddSubtract 7. Acquisition for cash of a competitor.…When deducing cash flow numbers, which of the following refers to a reflection of value? Select an answer: accounts receivable wage expenses accounts payable income statementB Net sales Cost of goods sold Selling and administrative expenses Interest expense Other income (expense) Income tax expense Net income Current assets. Noncurrent assets Total assets Current liabilities Long-term debt Total stockholders' equity Total liabilities and stockholders' equity Total assets Total stockholders' equity Current liabilities Total liabilities Average net accounts receivable Average inventory Net cash provided by operating activities Capital expenditures Cash dividends paid 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. Ratio Current ratio Accounts receivable turnover Average collection period Inventory turnover Days in inventory Profit margin Asset turnover Return on assets Debt to assets ratio Walmart Inc. Income Statement Data for Year Times interest earned Target Corporation Return on common stockholders' equity Free cash flow $66,900 44,000 14,400 750 (95) 1,500 $6,155 $17,000 26,800 $43,800 Balance Sheet Data (End of Year) $10,000 17,300 16,500 $43,800 13,400 10,000…
- The ________ is a measure of a company's ability to pay its current liabilities from cash and cash equivalents. A. cash conversion cycle B. cash ratio C. gross profit D. debt equity ratioWhen calculating free cash flow using balance sheet and income statement why do we add back after-tax interest on debt?Options I have for denominator are - average accounts receivable, net average total assets cost of goods sold current assets current liabilities interest expense net sales
- An increase in accounts receivable would affect which section of the cash flow statement? choices: revenue activities investing activities operating activities financing activitiesWhat is the amount and direction (+ or −) of the income taxes payable adjustment to net income in theoperating activities section of the statement of cash flows? What does this adjustment represent?Assets Current assets Cash and cash equivalents Accounts receivable, net Supplies Other current assets Total current assets Property and equipment Accumulated depreciation Net property and equipment Goodwill Deferred charges Other Total assets Liabilities and equity Current liabilities Accounts payable Accrued liabilities Current maturities of long-term debt Total current liabilities Operating lease liabilities non-current Long-term debt Other non-current liabilities Total liabilities Total liabilities Common stock Cummulative dividends Retained earnings Other Total equity Total liabilities and equities Revenue, net Operating charges Salaries, wages, and benefits Other operating expenses Supplies expense Depreciation and amortization Lease and rental expense Total operating charges Income from operations Interest expense, net Other (income) expense, net Income before income taxes Provision for income taxes Net income $61,268 1,560,847 Cost of debt (%) Cost of equity (%) Weighted…