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Working capital financing to accommodate the change

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What are the impacts on the operating cycle and cash conversion cycle due to the increase in the payment period (i.e. average collection period) from 30 days to 60 days? The company has 60 days to pay the suppliers and it takes 25 days to manufacture the units.

Also, assuming the company is selling 100 units per day with an increase of 60 units per day, how much should the company increase its working capital financing to accommodate the change?

Material Cost is $300 per unit

Sales price per unit is $620

Reference no: EM132546660

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