What is nikki cash conversion cycle

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1. Suppose you want to buy a house in Kuala Lumpur within four years, and you are currently saving for the down payment. Considering your current financial position, you expect to save RM6,000 at the end of the first year, and you forecast that your saving will rise by 8% annually thereafter. If your expected annual return is 6%, how much will be your total saving for the down payment at the end of 3rd year?

2. Nikki, a bag maker company, produces 1,200 bags per day at a cost of RM10 for materials and labor. It takes 20 days to covert raw materials into a bag. Nikki allows its customers to pay within 45 days for their purchases. Niki pays to its suppliers in 25 days.

(a) What is Nikki's cash conversion cycle?

(b) How much working capital should Niki invest for producing 1,200 batteries per day?

(c) How much will the investment in working capital change if Niki could defer its payables to |suppliers to 35 days?

Reference no: EM132595929

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