What is length of the cash cycle

Assignment Help Financial Management
Reference no: EM131558548

1. A firm has an accounts payable period of 46 days, an inventory period of 56 days, and an accounts receivable period of 34 days. What is the length of the cash cycle?

2. Utility Resources, Inc. receives an average of 80 checks each day with an average value of $312 per check. If the firm decides to install a lockbox system, it can reduce its average collection time by 2 days. The cost of the system is $.29 per check. The daily interest rate on Treasury bills is .015 percent. What is the present value of the daily cost of the lockbox system? Should lockbox system be installed?

Reference no: EM131558548

Questions Cloud

What must beta of this stock be : A stock has an expected return of 12.6 percent, the risk-free rate is 7 percent, and the market risk premium is 10 percent. What must the beta of this stock be?
What is portfolio beta : What is the portfolio beta?
What must the expected return on stock : A stock has a beta of 1.04, the expected return on the market is 10 percent and risk-free rate is 3.5 percent. What must the expected return on this stock be.
Investor carrying covered interest arbitrage : What is the yield to the US investor carrying covered interest arbitrage in Germany?
What is length of the cash cycle : A firm has an accounts payable period of 46 days, an inventory period of 56 days, What is the length of the cash cycle?
What are the portfolio weights for a portfolio : What are the portfolio weights for a portfolio that has 144 shares of Stock A that sell for $40 per share and 100 shares of Stock B that sell for $20 per share?
What is the company pretax cost of debt : If the tax rate is 33 percent, what is the aftertax cost of debt? What is the company's pretax cost of debt?
Equilibrium with required return equal to expected return : what is the value of the stock today (assume the market is in equilibrium with the required return equal to the expected return)?
What is the weighted average cost of capital for new funds : If the floatation cost for debt is 5% and the floatation cost for equity is 15%, what is the weighted average cost of capital (WACC) for new funds?

Reviews

Write a Review

Financial Management Questions & Answers

  How much do you owe on the loan today

Ten years ago your firm borrowed $3 million to purchase an office building using a loan with 7.80% APR and monthly payments for 30 years. What is the monthly payment? How much do you owe on the loan today?

  What is the IRR of the new investment

ABC Company is considering a new investment that will cost 50,000 to produce a new product that the president of the company has invented. The marketing dept of the company anticipates the new cash flows from the investment will be 10,000, 12,000, 12..

  Freight-hauling firm estimates-calculate size of payments

A freight-hauling firm estimates that it will need a new forklift in six years. The estimated cost of the vehicle is $40,000. The company sets up a sinking fund that pays 8% compounded semi annually, into which it will make semi annual payments to ac..

  Zero salvage value over an original ten year life

It is being depreciated on a straight line basis to a zero salvage value over an original ten year life.

  Zero-coupon bond is currently priced

A 2-year $1,000 par zero-coupon bond is currently priced at $819.00. A 2-year $1,000 annuity is currently priced at $1,712.52. If you want to invest $10,000 in one of the two securities, which is a better buy?

  Against retail electronics for the cost of the goods

Quality Computer Company agrees to sell one hundred hard drives to Retail Electronics, Inc. The hard drives, which Retail Electronics expressly requires to have certain amounts of memory, are to be shipped “F.O.B. A few hours later, the drives are de..

  What is the total capital the company raised

What is the total capital the company raised?

  What is the total corporate value

What is the total corporate value? What is the firm's WACC?

  Considering purchasing new machine

Builtrite is considering purchasing a new machine that would cost $60,000 and the machine would be depreciated (straight line) down to $0 over its five year life. At the end of five years it is believed that the machine could be sold for $15,000. The..

  If portion of an investment is sold

If a portion of an investment is sold, first-in, first-out method. average cost method and specific identification method

  Target capital structure of debt-preferred stock

Shi Importers' balance sheet shows $300 million in debt, $50 million in preferred stock, and $250 million in total common equity. Shi's tax rate is 40%, rd = 7%, rps = 7.9%, and rs = 14%. If Shi has a target capital structure of 30% debt, 5% preferre..

  How much of gain will be taxed at capital gains rates

On December 1, 2015, Bernadine sold a Machine for $100,000. The Machine had originally cost $140,000 and, over the years, Bernadine had claimed $60,000 in depreciation. How much of the gain will be taxed at ordinary income rates? (section 1245 recapt..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd