Now it's time for you to practice what you've learned. Suppose your startup has $15.00 million...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Now it's time for you to practice what you've learned. Suppose your startup has $15.00 million in sales, $2.00 million of inventories, $3.50 million of receivables, and $1.10 million of payables. Your cost of goods sold is 50% of sales, and you borrow funds to finance your operations at 8%. The startup's cash conversion cycle is days. Suppose now that you were able to lower your inventories and receivables by 5% and at the same time increase payables by 5%. Given that your sales and costs have not changed, your startup's cash conversion cycle became days. As a result of the 5% change in inventories, receivable and payables, you were able to free up by in cash and your pre-tax profits will Now it's time for you to practice what you've learned. Suppose your startup has $15.00 million in sales, $2.00 million of inventories, $3.50 million of receivables, and $1.10 million of payables. Your cost of goods sold is 50% of sales, and you borrow funds to finance your operations at 8%. The startup's cash conversion cycle is days. Suppose now that you were able to lower your inventories and receivables by 5% and at the same time increase payables by 5%. Given that your sales and costs have not changed, your startup's cash conversion cycle became days. As a result of the 5% change in inventories, receivable and payables, you were able to free up by in cash and your pre-tax profits will
Expert Answer:
Answer rating: 100% (QA)
To solve the problem you will need to use the following formulas Cash conversion cycle Inventory Rec... View the full answer
Related Book For
Auditing The Art and Science of Assurance Engagements
ISBN: 978-0133405507
13th Canadian edition
Authors: Alvin A. Arens, Randal J. Elder, Mark S. Beasley, Joanne C. Jones
Posted Date:
Students also viewed these finance questions
-
1. What evidence is there that Michelle lacks contentment? 2. Inwhat ways is Michelle exhibiting ambivalence toward her finances? 3. What financial idols does Michelle have in her life? 4. What goals...
-
The Crazy Eddie fraud may appear smaller and gentler than the massive billion-dollar frauds exposed in recent times, such as Bernie Madoffs Ponzi scheme, frauds in the subprime mortgage market, the...
-
You are the manager of an educational facility and have beenasked to predict analyze the electric cost for 2020 based on the following 12 months of Information, You know the electric cost has both...
-
The following selected accounts and their current balances appear in the ledger of Clairemont Co. for the fiscal year ended May 31, 2019: Instructions 1. Prepare a multiple-step income statement. 2....
-
Describe the homogeneity of variance assumption and explain why it is important for the independentmeasures t test.
-
A nursety rhyme goes "Humpty Dumpty sat on a wall, Humpty Dumpty had a great fall. All the king's horses and all the king's men couldn't put Humpty Dumpty together again." (a) Describe the energy of...
-
Selected financial information about Upper End Clothing, Inc. is as follows: Total assets .............................................................. $20,000,000 Total liabilities...
-
Consider the sensitivity report below for the problems which follow. variable cells cell name final value reduced cost objective coefficient allowable increase allowable decrease $b2 units produced...
-
Evaluate Seth Goldmans leadership performance on the concept of the Triple Bottom Line using at least two (2) examples from both resources (at least four [4] total examples) to support your...
-
Attached is the question Refer to the reading by Einav and Finkelstein: "Adverse Selection: Theory and Empirics in Pictures." Take the case in which all individuals are risk averse and where marginal...
-
Instruction This assessment task requires you conduct research and develop a workforce plan for King Edward VII College. You will also be required to communicate the rationale for, as well as...
-
Many cyclists raise well beyond the $3,000 minimum for AIDS/Life Cycle. Roadie participants (who are not required to raise any funds) often fundraise as well. What motivates these individuals to...
-
a Word document where you answer the following premises (use the questions as a guide for your written work): 1. What is budgeting? 2. How does budgeting help in decision making? 3. What are the main...
-
2.7 2.8 2.9 Find the complement of the following expressions: a) xy'+x'y List the truth table of the functions: a) F=xy+xy'+y'z Draw logic diagrams to implement the following Boolean expressions: a)...
-
Record transactions for the following transaction and prepare financial statements including trial balance for July 2019. A. Peter invested $10,000 in the business from his personal saving account....
-
In the circuit shown in Figure 4, a battery supplies a constant voltage of 40 V, the inductance is 2 H, the resistance is 10, and l(0) = 0. (a) Find l(t). (b) Find the current after 0.1s.
-
List the types of authorizations in the human resources and payroll cycle, and state the type of misstatement that is increased when each authorization is lacking.
-
As part of the analytical procedures of Mahogany Products Inc., you perform calculations of the following ratios: REQUIRED For each of the preceding ratios: a. State whether there is a need to...
-
Identify the factors that an auditor uses to determine the appropriate TER. Compare the sample size for a TER of 6 percent with that of 3 percent, all other factors being equal.
-
Which of the following is a discrete probability distribution? Approach In a discrete probability distribution, the sum of the probabilities must equal 1, and all probabilities must be between 0 and...
-
Graph the discrete probability distribution given in Table 1 from Example 2. Approach In the graph of a discrete probability distribution, the horizontal axis represents the values of the discrete...
-
Compute the mean of the discrete random variable given in Table 1 from Example 2. Approach Find the mean of a discrete random variable by multiplying each value of the random variable by its...
Study smarter with the SolutionInn App