FIN 515 Week 7 problem set

Feb 3rd, 2012
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DeVry University
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Week 7 Problem Set Answer the following questions and solve the following problems in the space provided. When you are done, save the file in the format flastname_Week_7_Problem_Set.docx (where flastname is your first initial and your last name), and submit it to the appropriate Dropbox. Chapter 26 (page 903): 1. Answer the following questions: a. What is the difference between a firm’s cash cycle and its operating cycle? b. How will a firm’s cash cycle be affected if a firm increases its inventory, all else being equal? c. How will a firm’s cash cycle be affected if a firm begins to take the discounts offered by its suppliers, all else being equal? 4. The Greek Connection had sales of \$32 million in 2012, and a cost of goods sold of \$20 million. A simplified balance sheet for the firm appears below: THE GREEK CONNECTION Balance Sheet As of December 31, 2012 (in \$ thousand) Assets Liabilities and Equity Cash Accounts receivable Inventory \$ 2,000 3,950 1,300 Accounts payable Note

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Week 7 Problem SetAnswer the following questions and solve the following problems in the space provided. When you are done, save the file in the format flastname_Week_7_Problem_Set.docx (where flastname is your first initial and your last name), and submit it to the appropriate Dropbox.Chapter 26 (page 903):1. Answer the following questions:a.What is the difference between a firm's cash cycle and its operating cycle? A firm's cash cycle is the average length of time from when a firm pays cash for its inventory to when it receives cash from the sale of that inventory (or the end product that the firm produced with the inventory). It is calculated as the average number of days between the purchase of the initial inventory and the sale of the end product plus the average number of days it takes the firm's customers to pay cash for the inventory they purchase minus the average number of days the firm takes to pay its suppliers for the inventory. A firm's operating cycle is the average length of time between when a firm purchases its inventory and when the firm receives cash from the sale of the inventory. It is calculated as the average number of days between the purchase of th

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