Williams & Sons last year reported sales of $48 million, cost of goods sold (COGS) of $40 million, and an inventory turnover ratio of 4. The company is adopting a new inventory system. If the new system is able to reduce the firm's inventory level and increase the firm's inventory turnover ratio to 5 wh maintaining the same level of sales and COGS, how much cash will be freed up? Do not round intermediate calculations. Enter your answer in dollars. F example, an answer of $1.23 million should be entered as 1,230,000,000. Round your answer to the nearest dollar. $

Williams & Sons last year reported sales of $48 million, cost of goods sold (COGS) of $40 million, and an inventory turnover ratio of 4. The company is adopting a new inventory system. If the new system is able to reduce the firm's inventory level and increase the firm's inventory turnover ratio to 5 wh maintaining the same level of sales and COGS, how much cash will be freed up? Do not round intermediate calculations. Enter your answer in dollars. F example, an answer of $1.23 million should be entered as 1,230,000,000. Round your answer to the nearest dollar. $

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

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1. Assume that $1,000 is to be received 30 years from today. Compare the present values obtained using 0.05 and 0.20 as rates of discount. 2. The ABC Company has opened 10 new stores. It has incurred a great deal of expenses associated with opening the stores, and the stores have not yet built up enough clientele to be profitable. On the other hand, the stores are operating at profit levels exceeding expectations, and there are indications that they will be very profitable in the future. It is obvious that the stock market has not yet digested this latter fact, and the additional 50 stores this year, but to do so will require new stockholder capital acquired from the market (it has borrowed all it feels it is prudent to borrow and cannot obtain more capital from its current stockholders). Without the new capital, the stockholders can expect to earn an equivalent annual return of 0.15 on the current market value of their investment (assume there is $100 million or 1 million shares of…
You are trying to prepare financial statements for Bartlett Pickle Company, but seem to be missing its balance sheet. You have Bartlett's income statement, which shows sales last year were $300 million with a gross profit margin of 30 percent. You also know that credit sales equaled three-quarters of Bartlett's total revenues last year. In adlon, Bartlett had a collection period of 40 days, a payables period of 30 days, and an inventory turnover of 7 times based on cost of oods sold. Calculate Bartlett's year-ending balance for accounts receivable, inventory, and accounts payable. Note: Round your answers to 1 decimal place. Bartlett's year-ending balance (million) Accounts receivable Inventory Accounts payable BV3
Mattress Wholesalers, Inc. is constantly trying to reduce inventory in its supply chain. Last year, cost of goods sold was $7.55 million and inventory was $1.52 million. This year, costs of goods sold is $8.64 million and inventory investment is $1.57 million. a) What was its weeks of supply last year? weeks (round your response to two decimal places).
Which of the following statements is TRUE? When EBIT and total assets both increase by 25%, the basic earnings power will also increase O a. An increase in the quick ratio over time means that the company's liquidity position is improving. O b. approximately by 25%. A lower than the industry's average inventory turnover ratio means that the company turns over or sells O C. and replaces its inventory more times per year. A higher than industry average P/E ratio indicates the company's stock must be overvalued. d.
Chastain Corporation is trying to determine the effect of its inventory turnover ratio and days sales outstanding (DSO) on its cash conversion cycle. Chastain's 2016 sales (all on credit) were $285000; its cost of goods sold is 80% of sales; and it earned a net profit of 6%, or $17100. It turned over its inventory 6 times during the year, and its DSO was 35 days. The firm had fixed assets totaling $37000. Chastain's payables deferral period is 40 days. Assume 365 days in year for your calculations. A. Calculate Chastain's cash conversion cycle. Round your answer to two decimal places. Do not round intermediate calculations. B.Assuming Chastain holds negligible amounts of cash and marketable securities, calculate its total assets turnover and ROA. Round your answers to two decimal places. Do not round intermediate calculations. C.Suppose Chastain's managers believe that the inventory turnover can be raised to 8.9 times. What would Chastain's cash conversion cycle, total assets…
2. Margetis Inc. carries an average inventory of $750,000. Its annual sales are $10 million, its cost of goods sold is 75% of annual sales, and its average collection period is twice as long as its inventory conversion period. The firm buys on terms of net 30 days, and it pays on time. Its new CFO wants to decrease the cash conversion cycle by 10 days, based on a 365-day year. He believes he can reduce the average inventory to $647,260 with no effect on sales. By how much must the firm also reduce its accounts receivable to meet its goal in the reduction of the cash conversion cycle?
A firm with annual sales of $8,500,000 increases its inventory turnover from 3.0 to 4.0. How much would the company save annually in interest expense if the cost of carrying the inventory is 6 percent? Round your answer to the nearest dollar.
Williams & Sons last year reported sales of $38 million, cost of goods sold (COGS) of $30 million, and an inventory turnover ratio of 5. The company is now adopting a new inventory system. If the new system is able to reduce the firm's inventory level and increase the firm's inventory turnover ratio to 6 while maintaining the same level of sales and COGS, how much cash will be freed up? Do not round intermediate calculations. Enter your answer in dollars. For example, an answer of $1.23 million should be entered as 1,230,000,000. Round your answer to the nearest dollar. $
A. Management has developed a new inventory management system that it projects will reduce company inventory from $15,000,000 at the beginning of the next operating year to $12,000,000 at the end of the next operating year: will cash be generated by inventory or needed to fund inventory? And, by how much? a. $3,000,000 of cash generated by reducing inventory b. $12,000,000 of cash needed to fund inventory c. $254,000 of cash needed to fund the inventory reduction program d. $3,000,000 needed to fund inventory B. Accounts payable are projected to be $300,000 at the beginning of the next operating year and $500,000 at the end of the next operating year: will cash be generated by accounts payable or needed to fund accounts payable? And, by how much? a. $200,000 of cash generated by the increase in accounts payable (borrowed more money) b. $500,000 of cash needed to fund accounts payable c. $200,000 of cash needed to fund accounts payable d. No cash will be…
Williams & Sons last year reported sales of $127 million, cost of goods sold (COGS) of $105 and an inventory turnover ratio of 5. The company is now adopting a new inventory system. If the new system is able to reduce the firm's inventory level and increase the firm's inventory turnover ratio to 7 while maintaining the same level of sales and COGS, how much cash will be freed up? Do not round intermediate calculations. Round your answer to the nearest dollar.
Dream Corporation is trying to improve its inventory control system and has installed an online computer at its retail stores. Howe anticipates sales of 126,000 units per year, an ordering cost of P4 per order, and carrying costs of P1.008 per unit. The following year, the company learns it can reduce ordering costs to P1 per order but that carrying costs will stay the same at P1.008 per unit. What is the total cost of inventory to be expected?
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