Last year the company reported a sale of USD 8 million and an inventory turnover ratio of 4. It is now opting for a new inventory system that is able to reduce the firm's inventory level and increase the firm's inventory turnover turnover ratio to 6 while maintaining the same level of sales. How much cash will be freed up?
Last year the company reported a sale of USD 8 million and an inventory turnover ratio of 4. It is now opting for a new inventory system that is able to reduce the firm's inventory level and increase the firm's inventory turnover turnover ratio to 6 while maintaining the same level of sales. 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
Question
Provide solution
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you
Intermediate Financial Management (MindTap Course…
Finance
ISBN:
9781337395083
Author:
Eugene F. Brigham, Phillip R. Daves
Publisher:
Cengage Learning
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Intermediate Financial Management (MindTap Course…
Finance
ISBN:
9781337395083
Author:
Eugene F. Brigham, Phillip R. Daves
Publisher:
Cengage Learning
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT