Provide correct solution and accounting question Summit Corporation has an inventory conversion period of 70 days, anaverage collection period of 38 days, and a payables deferral period of 30days. Assume that cost of goods sold is 70% of sales. Assume 365 days in ayear for your calculations. If Summit's annual sales are $5,840,000 and allsales are on credit, what is the firm's investment in accounts receivable?Round your answer to the nearest dollar.

Step 1: Definition of Investment in Accounts ReceivableInvestment in Accounts Receivable refers to…

Answered: Summit Corporation has an inventory…

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter16: Supply Chains And Working Capital Management

Section: Chapter Questions

Problem 11P

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Negus Enterprises has an inventory conversion period of 50 days, an average collection period of 35 days, and a payables deferral period of 25 days. Assume that cost of goods sold is 80% of sales. What is the length of the firm’s cash conversion cycle? If annual sales are $4,380,000 and all sales are on credit, what is the firm’s investment in accounts receivable? How many times per year does Negus Enterprises turn over its inventory?
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Negus Enterprises has an inventory conversion period of 50 days, an average collection period of 35 days, and payables deferral period of 25 days. Assume that the costs of goods sold are 80% of its sales. a) What is the length of the firm's cash conversion cycle? b) If Negus's annual sales are $4,380,000 and all sales are on credit, what is the firm's investment in accounts receivable? c) How many times per year does Negus Enterprises turn over its inventory?
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