If sales can be maintained at existing levels while lowering inventory by $4,000,000 and accounts receivable by $2,000,000, by how many days would the cash conversion cycle be changed? Use a 365-day year. a.

-27.4

b.

-28.7

c.

-30.2

d.

-31.7

e.

-33.3

The cash conversion cycle is inventory conversion cycle + a/R cycle -- a/P cycle.

The old cash conversion cycle must first be determined.

(20,000,000 / 219178) + (16,000,000 / 219178) -- 35

= 91.25 + 73 -- 35 = 129.25

The new cash conversion cycle must first be determined.

(16,000,000 / 219178) + (14,000,000...

Its customers pay as follows: 40% pay in the first month and take the 2% discount, while the remaining 60% pay in the month following the sale and do not receive a discount. The firm has no bad debts. Purchases for next month's sales are constant at 50% of projected sales for the next month. "Other payments," which include payments for wages, rent, and taxes, are 25% of sales for the month. Construct a cash budget for a typical