Question
Desai Inc. has the following data, in thousands. Assume the firm uses a 365-day year. Annual...
Desai Inc. has the following data, in thousands. Assume the firm uses a 365-day year.
Annual sales $45,000
Annual cost of goods sold $30,000
Inventory $4,500
Accounts receivable $1,800
Accounts payable $2,500
1. What is the firm’s inventory conversion period?
*
38.93 days
54.75 days
14.60 days
30.42 days
None of the above
2. What is the firm’s average collection period?
*
38.93 days
54.75 days
14.60 days
30.42 days
None of the above
3. What is the firm’s payable deferral period?
*
38.93 days
54.75 days
14.60 days
30.42 days
None of the above
4. What is the firm’s cash conversion period?
*
38.93 days
54.75 days
14.60 days
30.42 days
None of the above
5. Assume the company could lower its inventories and
accounts receivables by 8% each, without affecting sales or cost of
goods sold, what would be the new CCC? *
50.37 days
13.43 days
33.38 days
30.42 days
None of the above
Homework Answers
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