Question
1) A company expects capital expenditures and depreciation to continue to offset each other and for both net income and increases in working capital to
1) A company expects capital expenditures and depreciation to continue to offset each other and for both net income and increases in working capital to grow at 5.8% per year. The firm cost of capital is 10.23%. If the firm was able to reduce its annual increase in working capital by 47.67%, What would be the effect on firm's value?. The firm Free Cash Flow and Working Capital for the year was 6.75M and 24.69M respectively.
a) Company A's for 2018 had $56,829.63M in Sales, $33,018.02M Cost of Goods Sold. The Account Receivable was $6,890.92M. Finally, the Inventory and Accounts Payable were $3,839.5M and $13,093.89M respectively. Use the information to compute the company's A cash conversion cycle.
b) Company A's for 2018 had $58,437.8M in Sales, $34,908.96M Cost of Goods Sold. The Account Receivable was $5,156.51M. Finally, the Inventory and Accounts Payable were $3,632.7M and $12,242.29M respectively. The company increases sales by 27% however keeping the same inventory. Applying the percentage of Sales Method, what would be the new CCC?
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