Granada Inc. considers the following: i) a developed inventory management system could lower the average inventory by $4,000 ii) improvements in the credit department could reduce account receivables by $2,000 iii) the purchasing department could negotiate better credit terms and thereby increase accounts payable by $2,000. Also, the company thinks that these changes would not affect either sales or the costs of goods sold. If the changes above were made, by how many days would the cash conversion cycle be lowered?

Granada Inc. considers the following: i) a developed inventory management system could lower the average inventory by $4,000 ii) improvements in the credit department could reduce account receivables by $2,000 iii) the purchasing department could negotiate better credit terms and thereby increase accounts payable by $2,000. Also, the company thinks that these changes would not affect either sales or the costs of goods sold. If the changes above were made, by how many days would the cash conversion cycle be lowered?

Name: 2Below are some financial data of Granada Inc.Annual sales: unchanged
Uploaded: 2024-03-20T06:32:37.000Z
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Description: 2Below are some financial data of Granada Inc.Annual sales: unchangedCost of goods sold: unchangedAverage inventory: lowered by $4,000Average receivables: lowered by $2,000Average payables: increased by $2,000Days in yearOriginal110,00080,00020,0001

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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