Company operating cycle and net operating cycle

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1. The difference between a company’s operating cycle and its net operating cycle is:

the number of days that it takes, on average, for the company to sell its inventory.

the number of days that it takes the company to pay on the accounts due its suppliers.

the number of days that it takes for the company’s cash investment in inventory to result in cash collections from customers.

2. Jemisen's firm has expected earnings before interest and taxes of $1,300. Its unlevered cost of capital is 14 percent and its tax rate is 33 percent. The firm has debt with both a book and a face value of $2,000. This debt has a 9 percent coupon and pays interest annually. What is the firm's weighted average cost of capital?

12.72 percent

13.19 percent

12.89 percent

13.57 percent

12.66 percent

Reference no: EM131908960

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