B. For year 2020, how much is invested in accounts receivable? C.For year 2020,

Question

B. For year 2020, how much is invested in accounts receivable?

C.For year 2020, how much is invested in inventory?

D.For year 2020, how much is accounts payable?

There is other charts but I dont think they are necessary for this problem. If there isnt enough info I can add the other charts

New Heritage Doll Company: Capital Budgeting Exhibit 1 Selected Operating Projections for Match My Doll Clothing Line Expansion 2014 9,082 8.0% 2020 14,411 8.0% 2017 13,344 8.0% Revenue 6,860 52.4% 4,500 8,409 9,808 10,593 I1,440 Revenue Growth 22.6% 8.0% 8.0% 8.0% Production Costs Fixed Production Expense (excl deprcciation) Variable Production Costs 674 7,685 242 660 5,521 178 5,078 6,000 192 152 5,029 152 5,419 207 7,373 3,089 10,462 224 7,963 3.336 11,299 152 152 Total Production Costs Selling, General & Administrative Total Operating Expenses 2,762 4,131 2,452 2,648 2,860 3,603 1,250 5,866 7,132 7,690 9,687 Operating Profit (1,250) 583 994 1,277 1.392 1,503 1,623 1.753 1.893 Working Capital Assumptions Minimum Cash Balance as % of Sales Days Sales Outstanding Inventory Turnover (prod. cost/ending inv.) Days Payable Outstanding (based on tot. op. exp.) 30% 59.2x 12.7x 31.0x 3.0%% 59.2x 12.7x 31.0x 3.0%% 59.2x 12.7x 3.0% 59.2x 12.7x 30% 59.2x 12.7x 31.0x 30% 59.2x 12.7x 31.0x 30% 59.2x 12.7x 31.0x 3.0% 3.0%% 3.0% 59.2x 12.7x 31.0x 59.2x 59.2x 30.9x Capital Expenditurcs 952 152 152 530

Explanation / Answer

A)

For the year 2020, minimum cash balance as a % of sales is 3%. Sales/Revenuw for 2020 is 14,411

Therefore, minimum cash balance = 3 * 14411 / 100 = 432.33

B)

Days Sale Outstanding = Accounts receivable / (annual sales / Days in accounting period)

Let us assume Days in accounting period = 365

Therefore, for the year 2020,

59.2 = Accounts Receivable / (14411 / 365)

Accounts Receivable = 2337.35

C)

Inventory Turnover = Cost of good sold / Inventory

Therefore, for the year 2020,

12.7 = 8600 / Inventory

Inventory = 677.17

D)

Days Payable Outstanding = Accounts Payable / (Costs of goods sold / Days in accounting period)

Let us assume Days in accounting period = 365

Therefore, for the year 2020,

31 = Accounts Payable / (8600 / 365)

Accounts Payable = 730.41

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