Wincon Inc. has originally planned for P10,000,000 sales for the comingyear. The sales manager suggested to loosen the credit policy from n/10 to n/20.With this changes, the sales figure is expected to increase by 15%. Averagecollection period will increase from 8 days to 15 days. Bad debts will increasefrom 1% to 2.5% of sales. Wincon has a variable cost rate of 60% and an imputedcost of capital at 14%. What would the net benefit/(cost) of this change in creditpolicy? The following information was gathered for your evaluation as thefinancial manager of a large manufacturing company:Inventory, BeginningAccounts Receivable, BeginningAccounts Payable, BeginningNet Purchases AF313P 100,000200,00080,0001,600,000CUSIVE U 2.000,0001,640,000Collections from customersCost of salesPayments to suppliers1,620,000Gross Profit Rate20%Based on the above, what is the cash conversion cycle of the entity(in days)?

Cash conversion cycle is calculated as sum of days in inventory, days in sales and days in account…

inancial manager of a large manufacturing company: Inventory, Beginning Accounts Receivable, Beginning Accounts Payable, Beginning Net Purchases AF313 Collections from customers Cost of sales P 100,000 200,000 80,000 1,600,000 2,000,000 1,640,000 1,620,000 20% CLUSIVE Payments to suppliers Gross Profit Rate Based on the above, what is the cash conversion cycle of the entity in davs)?

inancial manager of a large manufacturing company: Inventory, Beginning Accounts Receivable, Beginning Accounts Payable, Beginning Net Purchases AF313 Collections from customers Cost of sales P 100,000 200,000 80,000 1,600,000 2,000,000 1,640,000 1,620,000 20% CLUSIVE Payments to suppliers Gross Profit Rate Based on the above, what is the cash conversion cycle of the entity in davs)?

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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