pasha corporation produces moto Click here to read the ellook The Cash Conversio

Question

pasha corporation produces moto Click here to read the ellook The Cash Conversion Cyde Click here to read the eBook: Acceunts Receivable WORKING CAPTTAL INVESTHENT Pasha Corporation pro es motorvde batteries. pika ns out 1.600 battre. andthe firm generally pays "s woelers in 0 days. Aasume 365 days y for your tkistons. a. What is the length of Pasha's cash convernsion cyde? Round your ansuer to two decimal places a day araca of$5per battery Sar mitrah and labor. It win thofom 23 dny to omet mn www am b. At aeady state in which pashia prodaces 1.600 bateries a day, that amount of wering capeal muit frwez? Found your anwer toth. neamt ddar. Warking capinal lnanding

Explanation / Answer

a) Cash Conversion Cycle = Days Inventory Outstanding + Days Sales Outstanding - Days Payable Outstanding Cash conversion cycle = 23 + 42 -30 (days) 35 days b) Working capital financing = 1600 Batteries x 35 CCC x $5 $280,000 c) Cash conversion cycle = 23 + 42 - 50 (days) 15 days Working capital financing = 1600 Batteries x 15 CCC x $5 $120,000 d) Cash conversion cycle = 28 + 42 - 30 (days) 40 days Working capital financing = 2350 Batteries x 40 CCC x $11 $320,000

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