Business, 04.04.2020 08:20, jrstrom9090

Multiple changes in cash conversion cycle Garrett Industries turns over its inventory 6 times each year; it has an average collection period of 42 days and an average payment period of 27 days. The firm's annual sales are $2.7 million. Assume there is no difference in the investment per dollar of sales in inventory, receivables, and payables; and a 365-day year. a. Calculate the firm's cash conversion cycle, its daily cash operating expenditure, and the amount of resources needed to support its cash conversion cycle. b. Find the firm's cash conversion cycle and resource investment requirement if it makes the following changes simultaneously. (1) Shortens the average age of inventory by 7 days. (2) Speeds the collection of accounts receivable by an average of 9 days. (3) Extends the average payment period by 9 days. c. If the firm pays 9% for its resource investment, by how much, if anything, could it increase its annual profit as a result of the changes in part b? d. If the annual cost of achieving the profit in part c is $36 comma 000, what action would you recommend to the firm? Why? a. The firm's cash conversion cycle, CCC, is nothing days. (Round to the nearest whole day.)

Answers: 1

Show answers

Other questions on the subject: Business

Business, 21.06.2019 20:50, josephvcarter

Last year, western corporation had sales of $5 million, cost of goods sold of $3 million, operating expenses of $175,000 and depreciation of $125,000. the firm received $40,000 in dividend income and paid $200,000 in interest on loans. also, western sold stock during the year, receiving a $40,000 gain on stock owned 6 years, but losing $60,000 on stock owned 4 years. what is the firm's tax liability?

Answers: 2

continue

Business, 22.06.2019 01:50, emm3456

Atlas manufacturing produces a unique valve, and has the capacity to produce 50,000 valves annually. currently atlas produces 40,000 valves and is thinking about increasing production to 45,000 valves next year. what is the most likely behavior of total manufacturing costs and unit manufacturing costs given this change? a. total manufacturing costs will increase and unit manufacturing costs will also increase. b. total manufacturing costs will stay the same and unit manufacturing costs will stay the same. c. total manufacturing costs will increase and unit manufacturing costs will decrease. d. total manufacturing costs will increase and unit manufacturing costs will stay the same.

Answers: 1

continue

Business, 22.06.2019 11:00, mmcdaniels46867

Companies hd and ld are both profitable, and they have the same total assets (ta), total invested capital, sales (s), return on assets (roa), and profit margin (pm). both firms finance using only debt and common equity. however, company hd has the higher total debt to total capital ratio. which of the following statements is correct? a) company hd has a higher assets turnover than company ld. b) company hd has a higher return on equity than company ld. c) none of the other statements are correct because the information provided on the question is not enough. d) company hd has lower total assets turnover than company ld. e) company hd has a lower operating income (ebit) than company ld

Answers: 2

continue

Business, 22.06.2019 11:10, chloeholt123

Which of the following is an example of a production quota? a. the government sets an upper limit on the quantity that each dairy farmer can produce. b. the government sets a price floor in the market for dairy products. c. the government sets a lower limit on the quantity that each dairy farmer can produce. d. the government guarantees to buy a specified quantity of dairy products from farmers.

Answers: 2

continue

Do you know the correct answer?

Multiple changes in cash conversion cycle Garrett Industries turns over its inventory 6 times each y...