FIN 320 Week 3 Individual Assignment Assignments from the Readings

Apr 24th, 2015
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FIN 320 Week 3 Individual Assignment Assignments from the Readings

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Problem P13-1Cash conversion cycle American Products is concerned about managing cash efficiently. On the average, inventories have an age of 90 days, and accounts receivable are collected in 60 days. Accounts payable are paid approximately 30 days after they arise. The firm has annual sales of about $30 million. Assume there is no difference in the investment per dollar of sales in inventory, receivables, and payables; and a 365-day year. a. Calculate the firm's operating cycle. b. Calculate the firm's cash conversion cycle. c. Calculate the amount of resources needed to support the firm's cash conversion cycle. d. Discuss how management might be able to reduce the cash conversion cycle.P13-1.(a)Operating cycle (OC)?Average age of inventories? Average collection period?90 days ? 60 days?150 days(b)Cash Conversion Cycle (CCC)?Operating cycle ? Average paym

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