Question
Bukit Mahkota Inc is analyzing the performance of its cash management . On average , the firm holds inventory for 90 days , pays its
Bukit Mahkota Inc is analyzing the performance of its cash management . On average , the firm holds inventory for 90 days , pays its suppliers in 60 days , and collects its receivables in 90 days . The firm annual sales is RM14,000,000 cost of goods sold is RM9,500,000 and purchases is RM5,000,000. Bukit mahkota currently pays 10% for its financing (ASSUME 365 - days year) 1. Calculate the firm's operating cycle
2. Calculate the firm's cash conversion cycle
3. Calculate the amount of resources needed to support Bukit Mahkota's cash conversion cycle.
4. Calculate firm's annual savings if the cash conversion cycle is reduced by 20 days .
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