Last year, GreenTech Inc. reported a sale of USD 10 million and an inventory turnover ratio of 5. It is now implementing a new inventory system that aims to reduce the firm's inventory level and increase the inventory turnover ratio to 8, while keeping the sales level unchanged. How much cash will be freed up?

Last year, GreenTech Inc. reported a sale of USD 10 million and an inventory turnover ratio of 5. It is now implementing a new inventory system that aims to reduce the firm's inventory level and increase the inventory turnover ratio to 8, while keeping the sales level unchanged. How much cash will be freed up?

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter21: Supply Chains And Working Capital Management

Section: Chapter Questions

Problem 1P

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