(Related to Checkpoint 18.2) (Calculating the cash conversion cycle) Network Solutions just introduced a new, fully automated manufacturing plant that produces 2,000 wireless routers per day with materials costs of $45 per router and no other costs. The average number of days a router is held in inventory before being sold is 54 days. In addition, they generally pay their suppliers in 16 days, while collecting from their customers after 27 days. a. What is the cash conversion cycle? b. What would happen to the cash conversion cycle if they could stretch their payments to suppliers from 16 days to 36 days? c. How much would working capital be reduced if they stretched their payments to suppliers from 16 days to 36 days? a. The cash conversion cycle is days. (Round to the nearest whole number.)
(Related to Checkpoint 18.2) (Calculating the cash conversion cycle) Network Solutions just introduced a new, fully automated manufacturing plant that produces 2,000 wireless routers per day with materials costs of $45 per router and no other costs. The average number of days a router is held in inventory before being sold is 54 days. In addition, they generally pay their suppliers in 16 days, while collecting from their customers after 27 days. a. What is the cash conversion cycle? b. What would happen to the cash conversion cycle if they could stretch their payments to suppliers from 16 days to 36 days? c. How much would working capital be reduced if they stretched their payments to suppliers from 16 days to 36 days? a. The cash conversion cycle is days. (Round to the nearest whole number.)
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
Question
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
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education