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Cornerstones of Financial Accounting

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter11: The Statement Of Cash Flows

Section: Chapter Questions

Problem 15DQ

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How did you calculate the number?

A firm currently has a 35-day cash cycle. Assume that the
firm changes its operations such that it decreases its
receivables period by 4 days, increases its inventory period
by 2 days and decreases its payables period by 3 days. What
will the length of the cash cycle be after these changes?
How did you calculate the number?

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If the average age of the inventory is 90 days, the average age of accounts payable is 65 days, and the average age of accounts receivable is 60 days, how many days would be the net cash cycle?
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Assume a firm has a cash cycle of 73 days and an operating cycle of 127 days.What is its payables turnover? (Use 365 days a year. Round your answer to 2 decimal places.)
Consider the following cash flows: Year Cash Flow 0 –$7,400 1 2,100 2 4,700 3 1,900 4 1,600 What is the payback period for the cash flows? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
2) What is mark-to-market accounting? a. Hint: Use an example to demonstrate the type of accounting Enron was engaging in. The following sequence of cash flows will be helpful. Assume a 10% discount rate. t = 0 t = 1 4,950.00 t = 2 9,680.00 t = 3 (25,000.00) 16,637.50 First, calculate the accounting income for each year (i.e., use historical cost accounting). Second, calculate the income using Enron's method (i.e., fair value accounting).
Assume a firm generates $2,200 in slaes and has a $300 increase in accounts recieveables during an accoutning period. Based soley on this information, cash flow will increase by ? Please explain.
MC.15.088 « Question 9 Cass & Company has the following data. What is the firm's cash conversion eycle? Inventory Conversion Period = Receivables Collection Period = 47 days 17 days Payables Deferral Period = 25 days O a. 30 days O b. 38 days O c. 39 days O d. 46 days O e. 45 days
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