Please solve this question general accounting Globex Corp. has forecasted sales of $30.0 million for next year and expectsits cost of goods sold (COGS) to remain at 80% of sales. Currently, the firmholds $2.8 million in inventories, $2.3 million in accounts receivable, and $2.4million in accounts payable. (Use 365 days are the length of a year in allcalculations.)a. Approximately how long does it currently take Globex Corp. to convert rawmaterials to its finished products and then to sell them?b. On average, how long does it take from the time a sale is made until the timecash is collected from customers?c. Globex Corp. relies on customer credit when it buys raw materials from itssuppliers. How long does it take after the firm purchases materials before itsends cash to its suppliers?d. What is the length of Globex Corp.'s cash conversion cycle (CCC)?

Step 1: Define Cash Conversion CycleThe time length between the payment for raw material purchases…

Answered: Globex Corp. has forecasted sales of…

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter22: Providing And Obtaining Credit

Section: Chapter Questions

Problem 2MC

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Suppose the company has just the opposite news and now expects unit sales for August, September, and October to be double (200%) the original estimates. What effect will this have on the company’s net income and borrowing? Explain your findings.
If a firm has sales of $23,920,000 a year, and the average collection period for the industry is 60 days, what should this firm’s accounts receivable be if the firm is comparable to the industry? Assume there are 365 days in a year. Do not round intermediate calculations. Round your answer to the nearest dollar. $
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Lalit Lumber Company has sales of $13 million per year, all on credit terms calling for payment within 30 days, and its accounts receivable are $3.45 million. Assume 365 days in the year for your calculations. 1. What is Lalit's DSO? 2. What would DSO be if all customers paid on time?
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Suppose that Dunn Industries has annual sales of $2.3 million, cost of goods sold of $1,650,000, average inventories of $1,116,000, and average accounts receivable of $750,000. Assume that all of Dunn’s sales are on credit.What will be the firm’s operating cycle? (Use 365 days a year. Do not round intermediate calculations. Round your final answer to 2 decimal places.)
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