Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

Garrett Industries turns over its inventory six times each year; it has the average collection period of 45 days and the average payment period of thirty days. Firm’s annual sales are $ 3 million. Suppose there is no difference in investment per dollar of sales in inventory, receivables, and payables; and a 365 day year.

a) Compute the firm’s cash conversion cycle, the amount of resources needed to support its cash conversion cycle, and its daily cash operating expenditure.

b) Determine the firm’s cash conversion cycle and resource investment needs if it makes given changes concurrently.

i) Shortens the average age of inventory by 5 days.

ii) Speeds collection of accounts receivable by the average of 10 days.

iii) Extends average payment period by ten days.

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

d) If annual cost of achieving profit in part c is $ 35,000, what action would you suggest to the firm? Describe why?

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M914427

Have any Question? 


Related Questions in Basic Finance

1 develop at least three behavioral measures of each of the

1. Develop at least three behavioral measures of each of the following conceptual variables. Consider measures that are based on frequency, speed, duration, latency, and intensity. Consider the extent to which each of th ...

A 9-year bond has a yield of 6 and a duration of 7982 years

A 9-year bond has a yield of 6% and a duration of 7.982 years. If the market yield changes by 35 basis points, what is the percentage change in the bond's price? The percentage change in the bond's price is %? decrease o ...

1 complete the following table2 comment on the following

1 .Complete the following table: 2 .Comment on the following statement: "Forward rates are good predictors of future interest rates.

1 where is lead most likely to be found in a household2

1. Where is lead most likely to be found in a household? 2. Identify the criteria for determining existence of wetlands. 3. What happens to land containing an endangered species habitat? 4. Discuss a landowner's rights i ...

Part 11 prospective analysisforecast future financial

Part 1 1. Prospective Analysis Forecast future financial performance. Use the four valuation models outlined in class to produce an estimate of firm value, and compare to stock price. Perform sensitivity analysis and dis ...

1 what general rule can be developed concerning maximum

1. What general rule can be developed concerning maximum values and compounding intervals within a year? 2. What does the time value of money (TVM) mean? 3. How does discounting, as used in determining present value, rel ...

Ne at least three ways to reduce the possibility of scc

Name at least three ways to reduce the possibility of SCC ? Which is better, a relatively small anode or a large one and why? Is coating a fastener always helpful in fighting corrosion resistance, even if there are minor ...

Prove that algorithm 1019 in the special case where every

Prove that Algorithm 10.19, in the special case where every operation requires only one unit of one resource, can always find a softwarepipeline schedule meeting the lower bound. Suppose we have a cyclic data-dependence ...

One bond has 9 years until maturity and a coupon of 42 the

One bond has 9 years until maturity and a coupon of 4.2%. The coupon is paid semiannually. If the YTM is 6%, what is the value of this bond? There is another bond with 15 year to maturity with a coupon rate of 6%. This c ...

Sixx am manufacturing has a target debt-equity ratio of 065

Sixx AM Manufacturing has a target debt-equity ratio of 0.65. Its cost of equity is 15 percent, and its cost of debt is 10 percent. If the tax rate is 32 percent, what is the company's WACC?

  • 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

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

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen