What will be the net change in the cash conversion cycle

Assignment Help Financial Management

Reference no: EM131043499

Bredan Ltd has annual sales of $200 milion with a cost of goods sold of $150 million. They keep an average inventory of $60 millon. On average, the firm has accounts receivable of $50 million. The firm buys all raw materials on credit, its trade credit terms are net 30 days and it pays on time. The firm's managers are searching for ways to shorten the cash conversion cycle. If sales can be maintained at existing levels but inventory can be lowered by $15 million and accounts receivable can be lowered by $20 million, what will be the net change in the cash conversion cycle? (use a 360-day year)

Reference no: EM131043499

Questions Cloud

Appropriate discount rate-what is the present value : An investment will pay you $88,000 in six years. Assume the appropriate discount rate is 8 percent compounded daily. Required: What is the present value?

Interest compounded monthly : You’re prepared to make monthly payments of $185, beginning at the end of this month, into an account that pays 12 percent interest compounded monthly. Required: How many payments will you have made when your account balance reaches $52,000?

Interest compounded monthly on all outstanding balances : How long in years does it take you to completely pay off a credit card debt of $25000 if you make monthly payments of $100. the card charges 19.8% interest compounded monthly on all outstanding balances. n=? i=? PV=? PMT=? FY=? P/y=? C/Y=?

Cause the demand and supply curve for bonds to shift : As an initial project in this area, you have been assigned the task of creating a presentation that will show the top management team assigned this project the basics of what affects interest rates and how equilibrium prices change over time. What is..

What will be the net change in the cash conversion cycle : Bredan Ltd has annual sales of $200 milion with a cost of goods sold of $150 million. They keep an average inventory of $60 millon. On average, the firm has accounts receivable of $50 million. If sales can be maintained at existing levels but invento..

What is the expected capital gains yield : The next dividend payment by Halestorm, Inc., will be $2.12 per share. The dividends are anticipated to maintain a growth rate of 8 percent forever. The stock currently sells for $43 per share. What is the dividend yield? What is the expected capital..

What is the reward-to-volatility ratio for the equity fund : You manage an equity fund with an expected risk premium of 10.6% and a standard deviation of 20%. The rate on Treasury bills is 6%. Your client chooses to invest $50,000 of her portfolio in your equity fund and $50,000 in a T-bill money market fund. ..

Forward transactions and hedging : The three-month interest rate is 3% for the dollar and is 5% for the British pound. The current spot rate is $1.5556/xi. A dealer sells xi 20,000,000 forward for dollars for delivery in three months at $1.5479/xi.. Analyze risk that the dealer is fac..

Coupon rate and semiannual coupons is trading : Suppose a ten-year, $1,000 bond with an 8.9% coupon rate and semiannual coupons is trading for $1,034.46. What is the bond's yield to maturity (expressed as an APR with semiannual compounding)? If the bond's yield to maturity change to 9.2% APR, what..

User Account

All Pages