Mohammed company Products is analyzing the performance of its cash management. On the average, the firm...
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Mohammed company Products is analyzing the performance of its cash management. On the average, the firm holds inventory 70 days, pays its suppliers in 60 days, and collects its receivables in 50 days. The firm has a current annual outlay of JOD 20,000,000 on operating cycle investments. Mohammed currently pays 10 percent for its negotiated financing. (Assume a 360 day year) Calculate the daily expenditure and the firm's annual savings if the operating cycle is reduced by the firm holds inventory from 70 to 50 days: Select one: O a. daily expenditure: 55,555.555 JOD, annual savings: 111.111.111 JOD O b. daily expenditure: 45,000 JOD, annual savings: 44,444.5 JOD c. daily expenditure: 44,444.4 JOD, annual savings: 45,000 JOD O d. daily expenditure: 111,111.111 JOD, annual savings: 55,555.555 JOD Next page Mohammed company Products is analyzing the performance of its cash management. On the average, the firm holds inventory 70 days, pays its suppliers in 60 days, and collects its receivables in 50 days. The firm has a current annual outlay of JOD 20,000,000 on operating cycle investments. Mohammed currently pays 10 percent for its negotiated financing. (Assume a 360 day year) Calculate the daily expenditure and the firm's annual savings if the operating cycle is reduced by the firm holds inventory from 70 to 50 days: Select one: O a. daily expenditure: 55,555.555 JOD, annual savings: 111.111.111 JOD O b. daily expenditure: 45,000 JOD, annual savings: 44,444.5 JOD c. daily expenditure: 44,444.4 JOD, annual savings: 45,000 JOD O d. daily expenditure: 111,111.111 JOD, annual savings: 55,555.555 JOD Next page
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SOLUTION GIVEN Current Annual Outlay 20000000 JOD Reduction of the ... View the full answer
Related Book For
Accounting Information Systems
ISBN: 9780132871938
11th edition
Authors: George H. Bodnar, William S. Hopwood
Posted Date:
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