Working capital investment

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Reference no: EM13849810

Prestopino Corporation produces motorcycle batteries. Prestopino turns out 2,100 batteries a day at a cost of $5 per battery for materials and labor. It takes the firm 23 days to convert raw materials into a battery. Prestopino allows its customers 40 days in which to pay for the batteries, and the firm generally pays its suppliers in 30 days. Assume 365 days in year for your calculations.

By what amount could Prestopino reduce its working capital financing needs if it was able to stretch its payables deferral period to 47 days? Round your answer to the nearest cent.

Reference no: EM13849810

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