$8,200 worth of toys in December, $3,700 worth in January, $4,400 in February, a
ID: 2698330 • Letter: #
Question
$8,200 worth of toys in December, $3,700 worth in January, $4,400
in February, and $6,100 in March. The wholesale cost is 72 percent
of the retail price. The firm has a receivables period of 30 days,
a payables period of 60 days, and buys inventory one month prior to
selling it. What was the accounts payable balance at the end of
January?
cash cycle. Assume the firm changes its operations such that it
decreases its receivables period by 2 days, increases its inventory
period by 3 days, and increases its payables period by 4 days. What
will the length of the cash cycle be after these changes?
Explanation / Answer
$8,200 worth of toys in December, $3,700 worth in January, $4,400
in February, and $6,100 in March. The wholesale cost is 72 percent
of the retail price. The firm has a receivables period of 30 days,
a payables period of 60 days, and buys inventory one month prior to
selling it. What was the accounts payable balance at the end of
January?
The accounts payable balance at the end of January = (3700+4400)*72% = $5832
cash cycle. Assume the firm changes its operations such that it
decreases its receivables period by 2 days, increases its inventory
period by 3 days, and increases its payables period by 4 days. What
will the length of the cash cycle be after these changes?
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