Don't use ai given answer accounting questions Downtown Cafe has sales of $750,000, costs of goods sold of $450,000,inventory of $95,000, and accounts receivable of $60,000. How many days, onaverage, does it take the firm to sell its inventory assuming that all sales areon credit?A) 65.42 daysB) 77.21 daysc) 82.15 daysD) 71.35 daysE) 76.96 days

Step 1:Days taken by the company to sell its inventory will be measured by the inventory turnover…

Answered: Downtown Cafe has sales of $750,000,…

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter16: Supply Chains And Working Capital Management

Section: Chapter Questions

Problem 11P

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Medwig Corporation has a DSO of 17 days. The company averages 3,500 in sales each day (all customers take credit). What is the companys average accounts receivable?
Negus Enterprises has an inventory conversion period of 50 days, an average collection period of 35 days, and a payables deferral period of 25 days. Assume that cost of goods sold is 80% of sales. What is the length of the firm’s cash conversion cycle? If annual sales are $4,380,000 and all sales are on credit, what is the firm’s investment in accounts receivable? How many times per year does Negus Enterprises turn over its inventory?
Grunewald Industries sells on terms of 2/10, net 40. Gross sales last year were 4,562,500 and accounts receivable averaged 437,500. Half of Grunewalds customers paid on the 10th day and took discounts. What are the nominal and effective costs of trade credit to Grunewalds nondiscount customers? (Hint: Calculate daily sales based on a 365-day year, calculate the average receivables for discount customers, and then find the DSO for the nondiscount customers.)
Kantorovich Company normally takes 25 days to pay for its average daily credit purchases of $1,900. It has average daily sales of $2,900, and collects accounts in 20 days. What is its net credit position? Multiple Choice O $10,500 O $11,500 ($12,500) O ($10,500)
DOLLAR BILL'S, a retail store in New York City, buys its inventory on credit. Upon purchase, it is given 30 days in which to pay its suppliers. It sells all of its merchandise on credit. It extends 60 days of credit to its customers. Its inventory turnover rate is 60 days.Situation 1Using the Cash Conversion Model, measure DOLLAR BILL'S financing cycle in both days and money ($US) using the following assumptions: Sales of $730,000 Gross Margin of 30% Financing Rate 6.5% Situation 2Recent management decisions have had the following impact: DOLLAR BILL has renegotiated its credit line so that it has 35 days to pay its suppliers It now extends 45 days of credit to its customers, It has an inventory turnover rate of 45 days. All other factors remain the same. Has DOLLAR BILL’S financing cycle improved or declined? Quantify the change in days and in dollars. Please show your work.
DOLLAR BILL'S, a retail store in New York City, buys its inventory on credit. Upon purchase, it is given 30 days in which to pay its suppliers. It sells all of its merchandise on credit. It extends 60 days of credit to its customers. Its inventory turnover rate is 60 days.Situation 1Using the Cash Conversion Model, measure DOLLAR BILL'S financing cycle in both days and money ($US) using the following assumptions: Sales of $730,000 Gross Margin of 30% Financing Rate 6.5%
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"On average, a firm sells $2,500,000 in merchandise a month. Its cost of goods sold equals 80 percent of sales, and it keeps inventory equal to one-half of its monthly cost of goods on hand at all times. If the firm analyzes its accounts using a 360-day year, what is the firm's inventory conversion period?" Group of answer choices a. 360 days b. 180 days c. 30 days d. 15 days e. 10 days
A Mikey's sells $119,500 of its accounts receivable to factors at a 1% discount. The firm’s average collection period is one month. What is the dollar cost of the factoring service? Dollar-cost of the factoring service $_________ per month
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3) A large retailer obtains merchandise under the credit terms of 3/10, net 30, but routinely takes 50 days to pay its bills. (Because the retailer is an important customer, suppliers allow the firm to stretch its credit terms.) What is the retailer's effective cost of trade credit? Assume a 365-day year. Do not round intermediate calculations. Round your answer to two decimal places. %
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