How Help K 0 26%D nd A X + n 14 ABCDE Alba Ne sp HW 16(1) Q- Search Layout References Mailings Review View A- A A A DE 2 abe X, x2 A 23 :: Normal (1) if Sales = $15,000,000; Inventory = $2,000,000; A/R = $3,000,000; A/P = $1,000,000; COGS = 0.8(Sales); Interest on bank loan = 8%; CCC (Cash Conversion Cyde) = ? (2) Given the data above in (1), if lower inventories and receivables by 10% each and increase payables by 10%. Sales and COGS remain the same. What is the new CCC? (3) How much will cash be freed up comparing (2) with (1): 16-2 For the Company XYZ, If Sales = $10,000,000; A/R = $2,000,000; DSO = ? If all customers paid on time within 30 days (assuming that it makes no sense for customers to pay earlier than 30 days), then the firm's DSO - B0 days. If customers paid on time, what's the firm's A/R? And how much cash will be freed up? 16-3 If the Company ABC has the following data: Purchases = $8,000,000; terms = 3/5 net 60; currently pays on Day 5 and takes discounts. If the Company forgoes discounts, what's the additional trade credit that the Company receives? And what's the nominal and effective cost of trade credit? If the Company can obtain a bank loan with 10% periodical rate paid monthly, what's the effective annual rate of the bank loan? Comparing the effective annual rate with the effective cost of trade credit, bank loan or trade credit should the company use? English (United States W