Hello please provide solution Suppose that James Industries has annualsales of $7.47 million, cost of goods sold.of $3.95 million, average inventoriesof $1,300,000, and average accountsreceivable of $690,000. Assuming that allof James's sales are on credit, what will bethe firm's operating cycle?

The operating cycle measures the time it takes for a company to purchase inventory, sell it, and…

Answered: Suppose that James Industries has…

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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What will be the firm's operating cycle?
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If a firm has sales of $23,920,000 a year, and the average collection period for the industry is 60 days, what should this firm’s accounts receivable be if the firm is comparable to the industry? Assume there are 365 days in a year. Do not round intermediate calculations. Round your answer to the nearest dollar. $
Suppose a firm makes purchases of $3.65 million per year under terms of 2/10, net 30, and takes discounts. What is the average amount of accounts payable net of discounts? (Assume the $3.65 million of purchases is net of discounts—that is, gross purchases are $3,724,489.80, discounts are $74,489.80, and net purchases are $3.65 million.) Is there a cost of the trade credit the firm uses? If the firm did not take discounts but did pay on the due date, what would be its average payables and the nominal and effective costs of this nonfree trade credit? What would be the firm’s nominal and effective costs of not taking discounts if it could stretch its payments to 40 days?
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Consider a firm with an annual net income of $25 million, revenue of $68 million and cost of goods sold of $30 million. If the balance sheet amountsshow $3.5 million of inventory and $650,000 of property, plant & equipment, how many weeks of supply does the firm hold?
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Suppose that James Industries has annual sales of $7.47 million, cost of goods sold. of $3.95 million, average inventories of $1,300,000, and average accounts receivable of $690,000. Assuming that all of James's sales are on credit, what will be the firm's operating cycle?