Ch 15: Assignment- Working Capital Management 5. Cash conversion cycle Cash management is a very important function of manage that they can sustain growth and yet not run out of cash Consider the case of the Purple Panda Importers Corporation: Aa Aa rs. Companies need to manage their operations in a way expects its cost of 9oods Purple Panda Importers Corporation has forecasted sales of $27,000,000 for next year and sold (COGS) to remain at 70% of sales. Currently, the firm holds $3,100,000 in inventories, $1,800,000 in accounts receivable, and $2,400,000 in accounts payable. s and Approximately how long does it take Purple Panda Importers to convert ts raw materiels to its finished product then to sell those goods? (Note: In all calculations, assume that there are 365 days in a year.) 62.86 days O 50.89 days O 59.87 days O 53.88 days from the time a sale is made until the time cash is collected from customers. On average, it takes rs relies on customer credit when it buys raw materials from its suppliers. On average, it takes after the firm purchases materials before it sends cash to its suppliers. What is the length of Purple Panda Importers's cash conversion cycle (CCC)? O 34.07 days O 37.85 days O 39.74 days O 35.96 days Ch 15: Assignment- Working Capital Management O 34.07 days O 37.85 days O 39.74 days O 35.96 days The management at Purple Pance Importers wants to continue its intermai discussions regarding its cash management. One of the finance team members presents the following case to her cohorts: Which of the following responses to t statement is most accurate? he CFO'S Case in Discussion O The CFO's approximation of the length of the bank loans should be accurate, because it wil take 90 days for the company to manufacture, sell, and collect cash for its goods. All these things must occur for the company to be able to repay its loans from the bank Green Catepillar Garden Supplies Inc.'s management plans to finance its operations with bank loans that will be repaid as soon as cash is available. The company's management expects that it will take 50 days to manufacture and sell its products and 40 days to receive payment from its customers Green Catepillar Garden Supplies Inc.'s CFO has told the rest of the management team that they should expect the length of the bank loans to be approximately 90 days. O The CFO is not taking into account the amount of time the company has to pay its suppliers. Generally, there is a certain length of time between the purchase of materials and labor and the payment of cash for them. The CFO can reduce the estimated length of the bank loan by this amount of time Is it possible for a firm to have a negative CCC? O No O Yes