Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

Garrett Industries turns over its inventory 6 times each year; it has an average collection period of 45 days and an average payment period of 30 days. The firm's annual sales are $ 3 million. Assume there is no difference in the investment per dollar of sales in inventory, receivables, and payables; and a 365 day year.

a- find out 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 5 days.

2- Speeds the collection of accounts receivable by an average of 10 days.

3- Extends the average payment period by 10 days.

c- If the firm pays 13% for its resource investment, by how much, if anything, could it increase its annual profit as a result of changes in part b?

d- If the annual cost of achieving the profit in part c is $ 35,000, what action would you recommend to the firm ? Why?

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M939055

Have any Question? 


Related Questions in Basic Finance

Prepare an outline for a report presentationreview an

Prepare an outline for a report presentation. Review an analytical or recommendation report you prepared in Chapter 10. Assume that you have been given 15 minutes to present the most important information from your writt ...

There are basically 5 categories of financial statement

There are basically 5 categories of financial statement analysis that is employed to assess the health of companies related to their financial performance. They are generally classified as liquidity, efficiency, debt, pr ...

The following excerpt is from integrating strategic and

The following excerpt is from "Integrating Strategic and Financial Planning" by Lee Ann Runy (2005), which appeared on hospitalconnect.com (www.hhnmag.com/hhnmag app/hospitalconnect/search/article.jsp? dcrpath=HHNMAG/Pub ...

Psychology developed primarily as an experimental science

Psychology developed primarily as an experimental science. However, during the past 20 to 25 years, non-experimental methods (such as correlational research) have become increasingly popular. Why do you think this change ...

1 discuss some advantages and disadvantages to consider

1. Discuss some advantages and disadvantages to consider when considering FDI in a developing nation. 2. Identify a business that is not already franchising but has potential for international franchise success. Support ...

Suppose you are about to borrow 15000 for four years to buy

Suppose you are about to borrow $15,000 for four years to buy a new car. Briefly explain which of these situations you would prefer to be in: a. The interest rate on your loan is 10%, and you expect the annual inflation ...

Develop a behavioral or a free-format self-report measure

Develop a behavioral or a free-format self-report measure of the conceptual variable you assessed in problem 1, and collect the relevant data from the same people. Find a partner to help you code the responses, and compu ...

Choose an global industry and consider the following topics

Choose an global industry and consider the following topics: diversification, investment, management, exchange rates or currency forecasts. Which of these would be most significant to your selected industry and how would ...

Make sense of data-as a marriage counselor you have

Make sense of data:- As a marriage counselor, you have gathered the following statistics: a. The average age at which women marry for the fi rst time has increased by 1.5 years in the last decade. b. The average age at w ...

1 distinguish between a mortgage and a note2 what does it

1. Distinguish between a mortgage and a note. 2. What does it mean when a lender accelerates on a note? What is meant by forbearance? 3. Can borrowers pay off part, or all, of loans any time that they desire? 4. What doe ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro