1 Problem 15 01 (Cash Conversion Cycle) Parramore Corp has $11 million of sales, $1 million of inventories, $2 25 million of receivables, and $1 25 million of payables Its cost of goods sold is 85 of sales, and it finances working capital with bank loans at an 8 rate Assume 365 days in year for your calculations What is Parramore's cash conversion cycle (CCC) Do not round intermediate calculations Round your answer to two decimal places days If Parramore could lower its inventories and receivables by 9 each and increase its payables by 9 , all without affecting sales or cost of goods sold, what would be the new CCC Do not round intermediate calculations Round your answer to two decimal places days How much cash would be freed up, if Parramore could lower its inventories and receivables by 9 each and increase its payables by 9 , all without affecting sales or cost of goods sold Write out your answer completely For Example, 13 2 million should be entered as 13,200,000 Do not round intermediate calculations Round your answer to the nearest dollar $ By how much would pretax profits change, if Parramore could lower its inventories and receivables by 9 each and increase its payables by 9 , all without affecting sales or cost of goods sold Write out your answer completely For Example, 13 2 million should be entered as 13,200,000 Do not round intermediate calculations Round your answer to the nearest dollar $

The Answer is in the image, click to view ...

Question: 1. Problem 15.01 (Cash Conversion Cycle) Parramore Corp has $11 million of sales, $1 million of inventories, $2.25 million of receivables, and $1.25 million of

1. Problem 15.01 (Cash Conversion Cycle)

Parramore Corp has $11 million of sales, $1 million of inventories, $2.25 million of receivables, and $1.25 million of payables. Its cost of goods sold is 85% of sales, and it finances working capital with bank loans at an 8% rate. Assume 365 days in year for your calculations.

What is Parramore's cash conversion cycle (CCC)? Do not round intermediate calculations. Round your answer to two decimal places. days
If Parramore could lower its inventories and receivables by 9% each and increase its payables by 9%, all without affecting sales or cost of goods sold, what would be the new CCC? Do not round intermediate calculations. Round your answer to two decimal places. days
How much cash would be freed up, if Parramore could lower its inventories and receivables by 9% each and increase its payables by 9%, all without affecting sales or cost of goods sold? Write out your answer completely. For Example, 13.2 million should be entered as 13,200,000. Do not round intermediate calculations. Round your answer to the nearest dollar. $
By how much would pretax profits change, if Parramore could lower its inventories and receivables by 9% each and increase its payables by 9%, all without affecting sales or cost of goods sold? Write out your answer completely. For Example, 13.2 million should be entered as 13,200,000. Do not round intermediate calculations. Round your answer to the nearest dollar. $

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

Problem 15.01 CASH CONVERSION CYCLE Parramore Corp has $20 million of sales, $2 million of inventories, $4 million of receivables, and $3 million of payables. Its cost of goods sold is 80% of sales,...

CASH CONVERSION CYCLE Parramore Corp has $11 million of sales, $2 million of inventories, $4 million of receivables, and $1 million of payables. Its cost of goods sold is 70% of sales, and it...

Problem 15-1 Cash conversion cycle Parramore Corp has $14 million of sales, $3 million of inventories, $2 million of receivables, and $3 million of payables. Its cost of goods sold is 80% of sales,...

Problem 15-1 Cash conversion cycle Parramore Corp has $11 million of sales, $1 million of inventories, $3 million of receivables, and $1 million of payables. Its cost of goods sold is 70% of sales,...

CASH CONVERSION CYCLE Parramore Corp has $11 million of sales, $3 million of inventories, $4 million of receivables, and $1 million of payables. Its cost of goods sold is 70% of sales, and it...

CASH CONVERSION CYCLE Parramore Corp has $11 million of sales, $3 million of inventories, $2 million of receivables, and $1 million of payables. Its cost of goods sold is 85% of sales, and it...

CASH CONVERSION CYCLE Parramore Corp has $11 million of sales, $2 million of inventories, $2 million of receivables, and $2 million of payables. Its cost of goods sold is 85% of sales, and it...

CASH CONVERSION CYCLE Parramore Corp has $11 million of sales, $3 million of inventories, $4 million of receivables and $3 million of payables s cost of good sold is 75%, of ales, and t finances...

CASH CONVERSION CYCLE Parramore Corp has $11 million of sales, $1 million of inventories, $4 million of receivables, and $3 million of payables. Its cost of goods sold is 85% of sales, and it...

Problem Walk-Through CASH CONVERSION CYCLE Parramore Corp has $18 million of sales, $1 million of inventories, $4 million of receivables, and $2 million of payables. Its cost of goods sold is 65% of...

Consider the role of HR in a rapidly changing world. What needed changes do you foresee, due to continual advancements in technology and remote operations or unanticipated events such as a global...

What are compensating bank balances, and why are they not the same for all depositors?

2 2 out of 5 0 Review Later Which ratio would you use to determine how much profit a company makes after paying off its cost of goods sold? Net profit margin ratio Gross profit margin ratio Return on...

Qucstion 05 (3 points) How cold is it autside? The tempenture alone is not enough ta provide the answer, Oher factors including wind speed, relative harmidity, and sunshine play important roles in...