1 2 3 4 5 6 7 8 9 Annual outlays for operating cycle investments: Average collection period: Average payment period: Inventory turnover: Average inventory balance Working capital financing rate: What is the average age of inventory? What is cost of goods sold? What is the operating cycle? What is the cash conversion cycle? What is the amount of dollars required to finance net working capital? What is the total annual cost to finance working capital? Banyan is considering several operating changes. These effect of these changes would be: Increase in inventory turnover to 7.2 times. Increase in average collection period of 10 days. What is the new average aggof inventory? What is the new average inventory balance? What is the new average collection period? What is the new CCC? What is the new annual cost of financing? Selected inventory information for Banyan Environmental: Pallets of herbicide purchased: Chemical composition: Annual carrying cost per pallet: 1 Cost of placing each order: What is the economic order quanty for herbicide? $ 25,000.00 s5 47 days 28 days 6.5 times a year 2,300 6.25% 2.2 times 10 days 1,200 glyphosate 57.00 850.00

1 2 3 4 5 6 7 8 9 Annual outlays for operating cycle investments: Average collection period: Average payment period: Inventory turnover: Average inventory balance Working capital financing rate: What is the average age of inventory? What is cost of goods sold? What is the operating cycle? What is the cash conversion cycle? What is the amount of dollars required to finance net working capital? What is the total annual cost to finance working capital? Banyan is considering several operating changes. These effect of these changes would be: Increase in inventory turnover to 7.2 times. Increase in average collection period of 10 days. What is the new average aggof inventory? What is the new average inventory balance? What is the new average collection period? What is the new CCC? What is the new annual cost of financing? Selected inventory information for Banyan Environmental: Pallets of herbicide purchased: Chemical composition: Annual carrying cost per pallet: 1 Cost of placing each order: What is the economic order quanty for herbicide? $ 25,000.00 s5 47 days 28 days 6.5 times a year 2,300 6.25% 2.2 times 10 days 1,200 glyphosate 57.00 850.00

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter12: Corporate Valuation And Financial Planning

Section: Chapter Questions

Problem 1Q

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Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

Question

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Annual outlays for operating cycle investments:
Average collection period:
Average payment period:
Inventory turnover:
Average inventory balance
Working capital financing rate:
What is the average age of inventory?
What is cost of goods sold?
What is the operating cycle?
What is the cash conversion cycle?
What is the amount of dollars required to finance net working capital?
What is the total annual cost to finance working capital?
Banyan is considering several operating changes.
These effect of these changes would be:
Increase in inventory turnover to 7.2 times.
Increase in average collection period of 10 days.
What is the new average aggof inventory?
What is the new average inventory balance?
What is the new average collection period?
What is the new CCC?
What is the new annual cost of financing?
Selected inventory information for Banyan Environmental:
Pallets of herbicide purchased:
Chemical composition:
Annual carrying cost per pallet: 1
Cost of placing each order:
What is the economic order quanty for herbicide?
$ 25,000.00
47 days
28 days
6.5 times a year
2,300
6.25%
2.2 times
10 days
1,200
glyphosate
57.00
850.00

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