A CARDBOARD BOX FACTORY pays its suppliers 40 days after making the purchase and receiving the goods. The average collection period is 45 days, i.e. its customers settle their debt with the company in that time; and the average inventory age is based on the inventory turnover which is 10 times a year. The company spends about $1.23 million in operating cycle investments. With this data we need to calculate: The operating cycle. The cash conversion cycle. The cash turnover. The minimum cash balance. You plan to make modifications to your policies so that you can decrease your PPC by 10 days, and decrease your EPI by 2 times (before converting it to days). Negotiations with your supplier have been unsuccessful and the payment term has been reduced by 10 days. With these data you have
A CARDBOARD BOX FACTORY pays its suppliers 40 days after making the purchase and receiving the goods. The average collection period is 45 days, i.e. its customers settle their debt with the company in that time; and the average inventory age is based on the inventory turnover which is 10 times a year. The company spends about $1.23 million in operating cycle investments. With this data we need to calculate: The operating cycle. The cash conversion cycle. The cash turnover. The minimum cash balance. You plan to make modifications to your policies so that you can decrease your PPC by 10 days, and decrease your EPI by 2 times (before converting it to days). Negotiations with your supplier have been unsuccessful and the payment term has been reduced by 10 days. With these data you have
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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A CARDBOARD BOX FACTORY pays its suppliers 40 days after making the purchase and receiving the goods. The average collection period is 45 days, i.e. its customers settle their debt with the company in that time; and the average inventory age is based on the inventory turnover which is 10 times a year. The company spends about $1.23 million in operating cycle investments. With this data we need to calculate:
The operating cycle.
The cash conversion cycle.
The cash turnover.
The minimum cash balance.
You plan to make modifications to your policies so that you can decrease your PPC by 10 days, and decrease your EPI by 2 times (before converting it to days). Negotiations with your supplier have been unsuccessful and the payment term has been reduced by 10 days. With these data you have to calculate:
Re-calculate the Operating Cycle, the SCC, RC and SMC introducing the proposed changes.
Calculate the
Transcribed Image Text:Un FÁBRICA DE CAJAS DE CARTÓN paga a sus proveedores 40 días después de efectuar la compra y recibir la mercancía.
El período promedio de cobranza es de 45 días, es decir sus clientes liquidan su adeuda con la empresa en ese tiempo; y
la edad promedio de inventario se basa en la rotación del mismo que es de 10 veces al año. La empresa gasta alrededor
de $1.23 millones en inversiones del ciclo operativo. Con estos datos hay que calcular:
1. El ciclo operativo.
2. El ciclo de conversión de efectivo.
3. La rotación de caja.
4. El saldo mínimo de caja.
Planea hacer modificaciones a sus políticas de modo que logre disminuir en 10 días su PPC, y disminuir en 2 veces (antes
de convertirlo a días) su EPI. Con su proveedor no han tenido éxito las negociaciones y se redujo el plazo de pago en 10
días. Con estos datos hay que calcular:
• Re-calcular el Ciclo operativo, el CCE, RC y SMC introduciendo los cambios propuestos.
• Calcular el costo de oportunidad que los cambios provoquen, si la tasa de interés que maneja la empresa es
del 8%.
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