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What effect will changes have on the firm cash cycle

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Question 1: A firm is considering several policy changes to increase sales. It will increase the variety of goods it keeps in inventory, but this will increase inventory by $11,800. It will offer more liberal sales terms, but this will result in average receivables increasing by $68,600. These actions are expected to increase sales by $818,000 per year, and cost of goods will remain at 80% of sales. Because of the firm's increased purchases for its own production needs, average payables will increase by $36,800. What effect will these changes have on the firm's cash cycle?

Reference no: EM132879271

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