What is DD Company cash conversion cycle

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Q1. DD Company has an inventory conversion period of 90 days, a receivable collection period of 50 days, and an accounts receivable payment period of 30 days.

1) What is DD Company's cash conversion cycle?

2) When selling PT. DD amounting to Rp150 million a year and all of them are credit sales, the amount of trade receivables? (use a year = 360 days)

3) What is PT DD's inventory turnover in a year?

Q2. PT. ZP wants to buy an automatic machine that uses the latest computerized technology. The purchase of the automatic machine requires a fee of IDR 2,400,000. The machine is considered to have an economic life of 5 years without any residual value.

Every year, PT. ZP expects cash income of IDR 3,900,000 and cash disbursements of IDR 3,000,000.

1) Calculate the payback period for the automatic machine!

2) Calculate the ARR (accounting rate of return).

Reference no: EM133050087

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