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13. A firm’s creditor has announced that the firm must carry at least 10% of its...

13. A firm’s creditor has announced that the firm must carry at least 10% of its asset base in the form of cash holdings. If the total asset base is $1,600,000, how much must the firm carry in cash holdings? During the most recent fiscal year, a firm earned revenues of $10,000,000 and net income of $2,000,000. Over this same period, depreciation expense was $500,000 and receivables increased by $200,000 and payables increased by $300,000. What was the firm’s cash conversion efficiency ratio?

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