Need help with only part 3.) ...... Primrose Corp has $16 million of sales, $1 m

Question

Need help with only part 3.) ......

Primrose Corp has $16 million of sales, $1 million of inventories, $4 million of receivables, and $3 million of payables. Its cost of goods sold is 75% of sales, and it finances working capital with bank loans at an 8% rate. Assume 365 days in year for your calculations. Do not round intermediate steps.

1.) What is Primrose's cash conversion cycle (CCC)? (30.42) days

2.) If Primrose could lower its inventories and receivables by 7% each and increase its payables by 7%, all without affecting sales or cost of goods sold, what would be the new CCC? (15.51) days

3.) How much cash would be freed-up? Round your answer to the nearest cent. $ _________

Explanation / Answer

Pre Tax profit will Increase by 8%*0.56M = $0.04 M or $44,800.00

Related Questions

Navigate

• Browse (All)
• Browse N
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.