Question 11 Ashraf Bhd operates a successful business. The firm has an inventory conversion period of...
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Question 11 Ashraf Bhd operates a successful business. The firm has an inventory conversion period of 60 days, a receivables conversion period of 35 days and a payable deferral period of 30 days. The firm has a current annual outlay of RM1,000,000 in one-cycle investments and pays 10% for the negotiated financing. Required: a. b. C. Calculate the firm's operating cycle. Calculate the firm's cash conversion cycle. Calculate the firm's annual savings if the operating cycle is reduced by 5 days. Question 11 Ashraf Bhd operates a successful business. The firm has an inventory conversion period of 60 days, a receivables conversion period of 35 days and a payable deferral period of 30 days. The firm has a current annual outlay of RM1,000,000 in one-cycle investments and pays 10% for the negotiated financing. Required: a. b. C. Calculate the firm's operating cycle. Calculate the firm's cash conversion cycle. Calculate the firm's annual savings if the operating cycle is reduced by 5 days.
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Answer rating: 100% (QA)
a The firms operating cycle is 60 35 95 days This means that it takes the firm 95 days to convert ... View the full answer
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