Question
A firm is considering several policy changes to increase sales. It will increase the variety of goods it keeps in inventory, but this will increase
A firm is considering several policy changes to increase sales. It will increase the variety of goods it keeps in inventory, but this will increase inventory by $10,500. It will offer more liberal sales terms, but this will result in average receivables increasing by $66,000. These actions are expected to increase sales by $805,000 per year, and cost of goods will remain at 70% of sales. Because of the firms increased purchases for its own production needs, average payables will increase by $35,500. What effect will these changes have on the firms cash cycle? (Use 365 days in a year. Do not round your intermediate calculations. Round your answer to 2 decimal places.)
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