Financial Accounting Question get correct answer Bradley Electronics Ltd. produces smartphone batteries. Bradley produces 1,800batteries per day at a cost of $6 per battery for materials and labor. It takes the firm 22days to convert raw materials into a battery. Bradley allows its customers 45 days topay for the batteries, and the firm pays its suppliers in 35 days. Assume 365 days peryear for calculations. The cash conversion cycle is 32 days, with a working capitalinvestment of $285,000.Bradley's management is analyzing the effect of a proposed new production process onworking capital investment. The new process would:Reduce the inventory conversion period to 14 days••Increase daily production to 2,500 batteries•Increase the cost of materials and labor to $9 per batteryAssuming that the change does not affect the average collection period (45 days) or thepayables deferral period (35 days), what will be the new cash conversion cycle and thenew working capital financing requirement if the new process is implemented?

Step 1: Definition of Cash Conversion CycleThe cash conversion cycle (CCC) is the time required for…

Answered: Bradley Electronics Ltd. produces…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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