Question

A firm’s average age of inventory is 80 days, the average collection period is 50 days.

a. With average payment period of 70 days, compute Cash Conversion Cycle (CCC).

b. **Explain**
whether the CCC should be lengthened or shortened.

Answer #1

Calculation for cash conversion cycle is shown below

Nexus 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.
1 what is the length of the firms cash conversion
cycle?
2 if annual sales are 4380000 dollars and all sales
are on credit what is the firm's investment in accounts
receivable?
3 how many times per year does negus Enterprises turn
over its inventory?

Hatfield donuts limited has an average payment period of 40
days, an average Collection period of 50 days, and turns its
inventory around 10 times per year if management is able to change
its average collection period favorable by 9 days. Calculate the
new cash conversion cycle

Negus Enterprises has an inventory conversion period of 72 days,
an average collection period of 46 days, and a payables deferral
period of 25 days. Assume that cost of goods sold is 80% of sales.
Assume 365 days in year for your calculations.
A) What is the length of the firm's cash conversion cycle?
B) If Negus's annual sales are $3,523,450 and all sales are on
credit, what is the firm's investment in accounts receivable? Round
your answer to the...

Negus Enterprises has an inventory conversion period of 62 days,
an average collection period of 35 days, and a payables deferral
period of 36 days. Assume that cost of goods sold is 80% of sales.
Assume 365 days in year for your calculations.
What is the length of the firm's cash conversion cycle?
days
If Negus' annual sales are $3,705,000 and all sales are on
credit, what is the firm's investment in accounts receivable? Round
your answer to the nearest...

Cash Conversion Cycle
Negus Enterprises has an inventory conversion period of 60 days,
an average collection period of 48 days, and a payables deferral
period of 27 days. Assume that cost of goods sold is 80% of sales.
Assume a 365-day year. Do not round intermediate calculations.
What is the length of the firm's cash conversion cycle? Round
your answer to the nearest whole number.
___days
If annual sales are $4,124,500 and all sales are on credit, what
is the...

Space Enterprises has an inventory conversion period of 55 days,
an average collection period of 44 days, and a payables deferral
period of 29 days. Assume that cost of goods sold is 80% of sales.
Assume 365 days in year for your calculations. What is the length
of the firm's cash conversion cycle? 62 days If Space's annual
sales are $3,432,450 and all sales are on credit, what is the
firm's investment in accounts receivable? Round your answer to the...

Zane Corporation has an inventory conversion period of 86 days,
an average collection period of 33 days, and a payables deferral
period of 38 days. Assume 365 days in year for your
calculations.
Length of the cash conversion cycle = 81 days
Zane's annual sales are $3,457,635 and all sales are on
credit.
The investment in accounts receivable is $312,608.09
How many times per year does Zane turn over its
inventory? Assume that the cost of goods sold is 75%...

4- Interior Designs has a days sales in inventory of 51 days, an
average payment period of 38 days, and an average collection period
of 32 days. Management is considering an offer from their suppliers
to pay within 10 days and receive a 2 percent discount. If the new
discount is taken, the average payment period is expected to
decline by 26 days. If the new discount is taken, the operating
cycle will be _____ days. If new discount is...

Camp Manufacturing turns over its inventory 5 times each? year,
has an average payment period of 32 ?days, and has an average
collection period of 59 days. The firm has annual sales of ?$3.3
million and cost of goods sold of ?$2.3 million.???(Use a? 365-day
year.)
a.??Calculate the? firm's operating cycle and cash conversion
cycle.
b.??What is the dollar value of inventory held by the? firm?
c.??If the firm could reduce the average age of its inventory
from 73 days...

43. You have recently been hired to analyze a firm’s cash
conversion cycle. Using the following information and a 365-day
year: Current inventory = $120,000; Annual sales = $600,000;
Accounts receivable = $157,808; Accounts payable = $25,000; Total
annual purchases = $365,000. Calculate the firm’s cash conversion
cycle (CCC).
25 days
73 days
96 days
144 days
44. Based on the results in Question 43, which of the following
methods can be used to improve the firm’s cash conversion
cycle?...

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