Solve this Accounting problem If Maverick Industries has a cash cycle of35 days and an operating cycle of 92days, what is its average paymentperiod?a) 57b) 127c) 35d) 92

Explanation of Cash Cycle (Cash Conversion Cycle): The cash cycle represents the time it takes for a…

Answered: If Maverick Industries has a cash cycle…

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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Question 1 a) A company is due to receive a payment of £500,000 from a customer in 6 months’ time. To smooth its cashflows, the company would prefer to receive the payment immediately, and has agreed to transfer its entitlement to this payment to a third party (a discount house) in return for an immediate payment calculated using a rate of commercial discount of 16% per annum.How much will the immediate payment made by the discount house be?b) An investor puts £5,000 in a savings account that pays 10% simple interest at the end of each year. Compare how much the investor would have after 6 years if the money was:i. Invested for 6 years ii. Invested for 3 years, then immediately reinvested for a further 3 years. c) £250 is invested in a savings account. The nominal rate of interest convertible monthly for the first 3 months is 18% and the nominal rate of interest convertible quarterly for the next 9 months is 20%. How much is in the account at the end of the year?d) Calculate the…
Question 2. A company makes payments continuously at a rate of $200 per year. The payments are made between year 2 and 7. Find the accumulated value of these payments at time 10, using i = 6.5%. Hint: 1419.76
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A firm has an average age of inventory of 100 days, an average collection period of 40 days, and an average payment period of 30 days. The firm's cash conversion cycle is?
Use formula for level payment loans: PR = Kv^(n-t+1), where PR = principal repaid, K = payment (suppose K=1)
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If Maverick Industries has a cash cycle of 35 days and an operating cycle of 92 days, what is its average payment period? a) 57 b) 127 c) 35 d) 92