Chapter 12, Problem 10SE

A company currently has $78 million in sales, $36 million in current assets, $62 million in fixed assets, and $24 million in accounts payable. The fixed assets are currently operated with full capacity and will change proportionally with the sales growth. Sales are projected to be $105 million, current assets are projected to be $45.3 million, and accounts payable are projected to be $29.5 million. What are fixed assets projected to be, given this information? Answer

Suppose that Jensen Corporation has annual sales of $8.92 million, cost of goods sold of $4.73 million, average inventories of $1,580,000, and average accounts receivable of $820,000. Assuming that all of Jensen's sales are on credit, what will be the firm's operating cycle?

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