Question: ? _ _ P a r r a m o r e C o r p h a s $ 1 0 m i l

?__ParramoreCorphas$10millionofsales,$3millionofinventories,$3millionof_receivables,and$1millionofpayables.Itscostofgoodssoldis85%ofsales,anditfinancesworkingcapitalwithbankloansatan9%rate.Assume365daysinyearforyourcalculations.Donotroundintermediatesteps.
WhatisParramore'scashconversioncycle(CCC)?Donotroundintermediatecalculations.Roundyouranswertotwodecimalplaces.
days
IfParramorecouldloweritsinventoriesandreceivablesby10%eachandincreaseitspayablesby10%,allwithoutaffectingsalesorcostofgoodssold,whatwouldbethenewCCC?Donotroundintermediatecalculations.Roundyouranswertotwodecimalplaces.
days
Howmuchcashwouldbefreedup,ifParramorecouldloweritsinventoriesandreceivablesby10%eachandincreaseitspayablesby10%,allwithoutaffectingsalesorcostofgoodssold?Donotroundintermediatecalculations.Roundyouranswertothenearestcent.Writeoutyouranswercompletely.ForExample,13.2millionshouldbeenteredas13,200,000.
$
Byhowmuchwouldpretaxprofitschange,ifParramorecouldloweritsinventoriesandreceivablesby10%eachandincreaseitspayablesby10%,allwithoutaffectingsalesorcostofgoodssold?Donotroundintermediatecalculations.Roundyouranswertothenearestcent.Writeoutyouranswercompletely.ForExample,13.2millionshouldbeenteredas13,200,000.
$ParramoreCorphas$10millionofsales,$3millionofinventories,$3millionofreceivables,and$1millionofpayables.Itscostofgoodssoldis85%ofsales,andit

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!