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 what is the importance for an individual of understanding

1. What is the importance for an individual of understanding time value of money concepts? For a corporate manager? Under what circumstance would the time value of money be irrelevant? 2. From a time value of money persp ...

Describe the essentials of financial engineering some

Describe the essentials of financial engineering ? Some companies have come unstuck dealing financially engineered instruments. Why do you suppose this is? Banks pay big salaries to financial engineers. What traits do th ...

The stock of company a has a beta of 15 the return of

The stock of company A has a beta of 1.5. The return of market portfolio is 9% and the risk-free rate is1%. 1) According to the Capital Asset Pricing Model (CAPM), what is the expected return of this stock? 2) Assuming t ...

How would a financial manager determine optimal capital

How would a financial manager determine optimal capital structure? How this would fit in with the company's capital expenditures, growth plans and operating results?

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 ...

Lowell made a taxable gift of 2 million to his grandson and

Lowell made a taxable gift of $2 million to his grandson and allocated his remaining exemption of $500,000 to the gift. What is Lowell's GST tax liability in 2014?

In addition to the key words you should also be able to

In addition to the key words, you should also be able to define the following terms: within-subjects design repeated-measures design participant attrition history maturation instrumentation testing effects statistical re ...

You have recently been hired by swan motors inc smi in its

You have recently been hired by Swan Motors, Inc. (SMI), in its relatively new treasury management department. SMI was founded 8 years ago by Joe Swan. Joe found a method to manufacture a cheaper battery with much greate ...

Discuss the financial performance of the starbucks over the

Discuss the financial performance of the Starbucks over the past three years.

1 in what ways are experimental research designs preferable

1. In what ways are experimental research designs preferable to correlational or descriptive designs? What are the limitations of experimental designs? 2. What is the purpose of random assignment to conditions? 3. Descri ...

  • 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