C. Exodus Corp. is analyzing the performance of its cash management. On the average, the firm holds inventory 65 days, pays its suppliers in 35 days, and collects its receivables in 15 days. The firm has a current annual outlay of P1,960,000 on operating cycle investments. Exodus currently pays 10 percent for its negotiated financing. (Assume a 360-day year.) Calculate the following: a. Cash conversion cycle b. Operating cycle. c. Daily expenditure and the firm's annual savings if the operating cycle is reduced by 15 days.
C. Exodus Corp. is analyzing the performance of its cash management. On the average, the firm holds inventory 65 days, pays its suppliers in 35 days, and collects its receivables in 15 days. The firm has a current annual outlay of P1,960,000 on operating cycle investments. Exodus currently pays 10 percent for its negotiated financing. (Assume a 360-day year.) Calculate the following: a. Cash conversion cycle b. Operating cycle. c. Daily expenditure and the firm's annual savings if the operating cycle is reduced by 15 days.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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
Transcribed Image Text:C. Exodus Corp. is analyzing the performance of its cash management. On the average,
the firm holds inventory 65 days, pays its suppliers in 35 days, and collects its
receivables in 15 days. The firm has a current annual outlay of P1,960,000 on operating
cycle investments. Exodus currently pays 10 percent for its negotiated financing.
(Assume a 360-day year.)
Calculate the following:
a. Cash conversion cycle
b. Operating cycle.
c. Daily expenditure and the firm's annual savings if the operating cycle is reduced
by 15 days.
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