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Question
Porta Stadium, Inc. has annual sales of $50,000,000. Its cost of goods sold equals 80 percent of sales, and the company keeps $10,000,000 of inventory on hand. On average, the firm has accounts receivable of $7,500,000. The firm buys all raw materials on credit, its trade credit terms are net 30 days, and it pays on time. The firm's managers are searching for ways to shorten the cash conversion cycle. If sales can be maintained at existing levels, but inventory can be lowered by $2,000,000 and accounts receivable lowered by $833,333, what will be the net change in the cash conversion cycle? Use a 360-day year.
a. +114 days
b. u2212114 days
c. +24 days
d. u221224 days
e. u221290 days
Answer
This answer is hidden. It contains 1 characters.
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