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

56 of men consider themselves professional baseball fans

56% of men consider themselves professional baseball fans. You randomly select 10 men and ask each if he considers himself a professional baseball fan. Find the probability that the number who consider themselves basebal ...

1 provide an illustration that highlights the differences

1. Provide an illustration that highlights the differences between consumer and industrial packaging. 2. What is the primary purpose of bar coding in packaging? 1s the role of bar coding different in materials handling? ...

If you wish to protect yourself from falling prices what

If you wish to protect yourself from falling prices, what type of an order would be the best to use? If you wish to protect yourself from rising prices, what type of order is the best to use? If you wish to buy a market ...

1 what is a capitalization rate what are the different ways

1. What is a capitalization rate? What are the different ways of arriving at this rate for an appraisal? 2. If investors buy properties based on expected future benefits, what is the rationale for appraising a property b ...

You buy a stock for 35 per share one year later you receive

You buy a stock for $35 per share. One year later you receive a dividend of $3.50 per share and sell the stock for $30 per share. 1.What is your total rate of return on this investment?. 2.What is your capital gain or lo ...

Commenting on the abacus cdo case wall street journal

Commenting on the Abacus CDO case, Wall Street Journal columnist Brett Arends offered the opinion that "as a rule of thumb, the more complex a [financial] product is, the worse the deal." Do you agree? Why would a more c ...

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 ...

1 explain the difference between rejecting and failing to

1. Explain the difference between rejecting and failing to reject the null hypothesis. In which case does a researcher conclude that the independent variable has an effect on the dependent variable? 2. Distinguish betwee ...

Sunshine farms withering since naftasunshine farms incis a

SUNSHINE FARMS WITHERING SINCE NAFTA Sunshine Farms Inc.is a fourth-generation family business located in south Florida. Sunshine began as a small farm devoted to citrus fruits and vegetables, and over the years the comp ...

Theres no real difference between options and futures both

"There's no real difference between options and futures. Both are tools for controlling risk, and both are derivative products. It's just that with options you have to pay an option price, while futures require no upfron ...

  • 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