u need to determine the working capital using the cash conversion cycle method. If you have the following information regarding its costs and the economic cycle (of conversion into cash). And if the company has fixed total annual costs of $50,000 and variable costs of $100,000. Consider a year of 360 days. The product requires 12 hours of processing and the company works only one shift a day (8 hours), and the raw material takes 10 days to reach the plant. The product takes 3 days to reach the distributor. In addition, the following information is available: RAW MATERIAL STORAGE PERIOD : 16 days FINISHED GOODS INVENTARY PERIOD : 10 days CREDIT TO DISTRIBUTORS: 60 days

Q: The company bought raw materials on account and then paid for them within 30 days. They used the…

A: Account payable period = 30 Days Material conversion period = 100 Days Account receivable period =…

Q: The plant manager at a company would like to perform an analysis for a new $250,000 machine. If she…

A: Payback period method is a traditional method used in capital budgeting decisions which is used to…

Q: ustrial machine costs $124000 and is expected to earn annual net cash inflows as per the following…

A: NPV if the business sets their required rate of return at 11%  Year Cash flow DF@ 11% Discounted…

Q: The equipment needed to manufacture a product costs $1,000,000 to purchase.  This equipment has a…

A: SOLUTION- BREAK EVEN POINT  IS THE POINT AT WHICH TOTAL REVENUE EQUALS TO TOTAL COST OR EXPENSES.

Q: You are evaluating a project for a superior pickleball paddle.  You estimate the sales price to be…

A: NPV It is a capital budgeting tool to decide on whether the capital project is beneficial for the…

Q: A mining company need to decide which of the equipment models to use in a project that will last for…

A: Using excel

Q: A piece of labor-saving equipment has just come onto the market that Mitsui Electronics, Ltd., could…

A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Q: Consider the following: A factory can produce 150,000 units of a good/year at a cost of $100/unit…

A: Net Present Value: It is the difference between  sums of discounted cash inflows and cash outflows…

Q: Ranger Corporation is currently selling widgets for $40 at a cost of $20 per unit. Fixed costs are…

A: Selling Price = $40Cost = $20Production = 100 widgetsFixed cost = $500Operating cashflow only deals…

Q: You are evaluating a product for your company. You estimate the sales price of the product to be…

A: Sale price per unit=$200 Sales volume in Year 1=2,000 units Sales volume in Year 2=5,000 units Sales…

Q: Fanning Camps, Inc. leases the land on which it builds camp sites. Fanning is considering opening a…

A: Fixed cost is the cost which does not change with change in production volume. Variable cost changes…

Q: A car manufacturer is considering the purchase of an industrial robot for assembling cars. An…

A: A financial metric known as net present value (NPV) determines the difference between the present…

Q: To recover the waste heat from the processed fluid, a chemical industry planned to invest in a heat…

A: a. Calculate Incremental investment returns. Suggestion: Heat Exchanger 1 should be purchased as it…

Q: Calculate the Simple Payback in years for the following system: The initial capital investment for…

A: Concept. Payback period is the time or number of years required to recover initial investment . In…

Q: The actual cost of a material is $2.33 per produced unit. A Six sigma team develop a productivity…

A: IRR A financial analysis tool used to determine the profitability of possible investments is the…

Q: A piece of labor-saving equipment has just come onto the market that Mitsui Electronics, Limited,…

A: Payback Period= Purchase Cost / Annual Cost SavingsNet income = Annual Cost Savings -…

Q: A large textile company is trying to decide which sludge dewatering process it should use ahead of…

A: The problem is asking us to compare two systems, a centrifuge and a belt press, based on their…

Q: A consulting engineer is analysing to determine which machine should be invested to increase the…

A: When evaluating the investment in either a manually or automatically operated machine to increase…

Q: Ranger Corporation is currently selling widgets for $40 at a cost of $20 per unit. Fixed costs are…

A: CASH FLOW STATEMENT Cash flow statement provides additional information to user of financial…

Q: A project will increase revenue from $3.6 million to $4.4 million.  Wages are 30% of revenue.…

A: The objective of this question is to calculate the incremental expenses that will result from…

Q: Ford Motor Company is considering purchasing a new piece of equipment for one of its plants. The…

A: Contribution margin =      Sales - variable cost / sales - variable…

Q: Determine the average rate of return on the equipment, giving effect to straight-line depreciation…

A: The return that is earned on an investment annually is called average rate of return. This is the…

Q: Swifty Hammocks is considering the purchase of a new weaving machine to prepare fabric for its…

A: IRR is given by,  PV of cash inflows = initial cost PV = E(1-(1+r)-p)/r  Where, E = annual cashflow…

Q: A rotational molding operation has fixed costs of $10,000 per year and variable costs of $52 per…

A: Rotational molding process: Fixed costs = $10,000 Variable costs per unit = $52 Automation process:…

Q: Barker Production Company is considering the purchase of a flexible manufacturing system. The annual…

A: ..

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.