Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Kiley Corporation had the following data for the most recent year. The new CFO believes that an improved inventory management system could lower the average

Kiley Corporation had the following data for the most recent year. The new CFO believes that an improved inventory management system could lower the average inventory by $4000, that improvements in the credit department could reduce receivables by $2000, and that the purchasing department coudl negogite better credit termsanf thereby increase accounts payable by $2000. Futhermore, she thinks that these changes would not affect either sales or the costs of goods sold. If these changes were made by how many days would tbe cadh conversion cycle be lowered?
Original. Revised
Annual sales: $110000. $110000
unchanged
COGS: unchanged. $80000. $80000
Average inventory: $20000. $16000
lowered by $4000
Average receivables: $16000. $14000
lowered by $2000
Average payables: $10000. $12000
increase by $2000
Days in year. 365. 365

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

Cases In Financial Reporting

Authors: Ellen Engel, D. Eric Hirst, Mary Lea McAnally

8th Edition

1618531220, 9781618531223

More Books

Students also viewed these Finance questions

Question

Summarize the findings of behavior therapy outcome research.

Answered: 1 week ago