You prefer to extend credit on the assumption that you will be paid in full within 10 days of the sales. Firm X has average inventory of $720,000 with all cash sales (no credit sales) of $4,400,000. If you extend credit to this firm, can you expect to be paid on time? Assume 365 days in a year. Round your answer to the nearest whole number. The inventory turnover is days, therefore, you expect to be paid in 10 days.
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You prefer to extend credit on the assumption that you will be paid in full within 10 days of the sales. Firm X has average inventory of $720,000 with all cash sales (no credit sales) of $4,400,000. If you extend credit to this firm, can you expect to be paid on time? Assume 365 days in a year. Round your answer to the nearest whole number.
The inventory turnover is days, therefore, you expect to be paid in 10 days.
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- Assume that ABC Corporation pays for each purchase three (3) weeks after date of purchase. Maintains its inventory at a level equal to 9-day sales and are made on a 30-day charge basis.How long the cash cycle is and how many cash cycles it has in one year? Solution: 2. If ABC Corporation has annual credit sales of Ᵽ990,000 and its average accounts receivable is Ᵽ100,000, how many is its average collection period? Assuming that receivable turnover rate increases by 25%, how much would then be the estimated change in accounts receivable.Solution: 3. The following data are available from the records of ABC Corporation Annual sales Ᵽ 396,000Cost 70%Average inventory 50,000Based on the above information determine the following:a) Number of days sales in average inventoryb) Average inventory assuming that desired inventory turnover rateis 12x in one year. Solution:Han Corp's sales last year were $300,000, and its year-end receivables were $49,000. The firm sells on terms that call for customers to pay 30 days after the purchase, but some delay payment beyond Day 30. On average, how many days late do customers pay? Base your answer on this equation: DSO - Allowed credit period = Average days late, and use a 365-day year when calculating the DSO. Assume all sales to be on credit. Do not round your intermediate calculations.Zane Corporation has an inventory conversion period of 79 days, an average collection period of 43 days, and a payables deferral period of 50 days. Assume 365 days in year for your calculations. What is the length of the cash conversion cycle? Round your answer to two decimal places. days If Zane's annual sales are $3,598,365 and all sales are on credit, what is the investment in accounts receivable? Do not round intermediate calculations. Round your answer to the nearest cent. $ How many times per year does Zane turn over its inventory? Assume that the cost of goods sold is 75% of sales. Use sales in the numerator to calculate the turnover ratio. Do not round intermediate calculations. Round your answer to two decimal places. times
- The Dire Corporation has an inventory conversion period of 75 days, a receivables collection period of 38 days, and a payables deferral period of 30 days. What is the length of the firm’s cash conversion cycle? If Dire’s annual sales are $3,421,875 and all sales are on credit, what is the firm’s investment in accounts receivable? How many times per year does Dire turn over its inventory?Zane Corporation has an inventory conversion period of 76 days, an average collection period of 35 days, and a payables deferral period of 20 days. Assume 365 days in year for your calculations. What is the length of the cash conversion cycle? Round your answer to two decimal places.days If Zane's annual sales are $2,030,230 and all sales are on credit, what is the investment in accounts receivable? Do not round intermediate calculations. Round your answer to the nearest cent.$ How many times per year does Zane turn over its inventory? Assume that the cost of goods sold is 75% of sales. Use sales in the numerator to calculate the turnover ratio. Do not round intermediate calculations. Round your answer to two decimal places.xNegus Enterprises has an inventory conversion period of 50 days, an average collection period of 35 days, and a payables deferral period of 25 days.Assume that cost of goods sold is 80% of sales.a. What is the length of the firm’s cash conversion cycle?b. If annual sales are $4,380,000 and all sales are on credit, what is thefirm’s investment in accounts receivable?c. How many times per year does Negus Enterprises turn over its inventory?
- Your company has been offered credit terms on its purchases of 4/30, net 90days. What will be the nominal annual cost of trade credit if your companypays on the 35th day after receiving the invoice? (Assume a 365-day year.) Show your complete solution.еВook Zane Corporation has an inventory conversion period of 90 days, an average collection period of 34 days, and a payables deferral period of 48 days. Assume 365 days in year for your calculations. a. What is the length of the cash conversion cycle? Round your answer to two decimal places. days b. If Zane's annual sales are $3,454,540 and all sales are on credit, what is the investment in accounts receivable? Do not round intermediate calculations. Round your answer to the nearest cent. $ c. How many times per year does Zane turn over its inventory? Assume that the cost of goods sold is 75% of sales. Use sales in the numerator to calculate the turnover ratio. Do not round intermediate calculations. Round your answer to two decimal places.Zane Corporation has an inventory conversion period of 48 days, an average collection period of 33 days, and a payables deferral period of 33 days. Assume 365 days in year for your calculations. What is the length of the cash conversion cycle? Round your answer to two decimal places. If Zane's annual sales are $4,137,145 and all sales are on credit, what is the investment in accounts receivable? Do not round intermediate calculations. Round your answer to the nearest cent. How many times per year does Zane turn over its inventory? Assume that the cost of goods sold is 75% of sales. Use sales in the numerator to calculate the turnover ratio. Do not round intermediate calculations. Round your answer to two decimal places.
- Harper Corp.'s sales last year were $395,000, and its year-end receivables were $42,500. Harper sells on terms that call for customers to pay 30 days after the purchase, but many delay payment beyond Day 30. On average, how many days late do customers pay? Base your answer on this equation: DSO - Allowed credit period = Average days late, and use a 365-day year when calculating the DSO. O a. 9.74 b. 8.37 Oc8.81 Od. 7.95 Oe. 9.27A company is launching a new sales initiative and expects sales of $446,838 during the first year, and the gross profit margin to be 25%. To prepare for this, they plan to acquire 49 days worth of inventory. Their vendor will allow 48 days to pay its invoices. The company plans to sell only on account to its customers, so sales will be entirely credit based, and the average invoice is expected to take 44 days to collect. What amount of net working capital should be included in the initial investment? Enter your answer as a monetary amount rounded to four decimal places, but without the currency symbol. For example, if your answer is $90.1234, enter 90.1234 Type your answer...A CARDBOARD BOX FACTORY pays its suppliers 40 days after making the purchase and receiving the goods. The average collection period is 45 days, i.e. its customers settle their debt with the company in that time; and the average inventory age is based on the inventory turnover which is 10 times a year. The company spends about $1.23 million in operating cycle investments. With this data we need to calculate: The operating cycle.The cash conversion cycle.The cash turnover.The minimum cash balance.You plan to make modifications to your policies so that you can decrease your PPC by 10 days, and decrease your EPI by 2 times (before converting it to days). Negotiations with your supplier have been unsuccessful and the payment term has been reduced by 10 days. With these data you have to calculate: Re-calculate the Operating Cycle, the SCC, RC and SMC introducing the proposed changes.Calculate the opportunity cost that the changes will cause, if the company's interest rate is 8%.