Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question

Transcribed Image Text:Julekha
conversion period of 50 days, an average
cullecuion period (DSO) uf 35 lays, and a
payables deferral period of 25 days.
Assume that cost of goods sold is 80% of
Enterprises has an inventory
sales. Julekha's annual cost of labour is
Tk.550,00N) and annual cost of materials is
Tk.750,000. ASsume a year = 360 days.
a. What is the length of the firm's cash
conversion cycle?
b. II
annual
Sales
Negus'
Tk.4,380,(00) and all sales are on
credit, what is the fim's investment in
dCCDunts recrivahle?
c. How many times per year does Negus
Enterprises turn over its inventory?
d. How much working capital linancing
does Negus have to ensure to complete
the cash convPision cycle
are
Expert Solution

Step 1
Formulas:
- Cash conversion cycle = Inventory conversion period + Receivables collection period - Payables deferral period.
- Investment in accounts receivable = Receivable collection period/360*Net sales.
- Inventory turnover ratio = 360/Inventory conversion period.
Hi student,
Thanks for the question. As per Bartleby answering guidelines, we are allowed to answer only first 3 questions if there are multiple questions. Kindly post rest of the questions separately. Thank you.
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