Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

JB Hunt Corp. has annual sales of $80,000,000; its average inventory is $20,000,000; and its average accounts receivable is $16,000,000.The firm buys all raw materials

JB Hunt Corp. has annual sales of $80,000,000; its average inventory is $20,000,000; and its average accounts receivable is $16,000,000.The firm buys all raw materials on terms of net 35 days with cost of the good sold $180,000 per day.The firm is searching for ways to shorten the cash conversion cycle.If sales and cost of the good sold can be maintained at existing levels while lowering inventory conversion cycle by 20 days, lowering average collection period by 10 days and postponing its payable to 40 days, calculate the Exodus increase in its free cash flow after the change in its cash conversion cycle.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Personal Finance

Authors: Jack R. Kapoor, Les R. Dlabay, Robert J. Hughes, Melissa Hart

12th edition

1259720683, 978-1259720680

More Books

Students also viewed these Finance questions

Question

Discuss brief psychodynamic psychotherapy approaches.

Answered: 1 week ago

Question

_____ 3. the top line of a business

Answered: 1 week ago