P14-3: a-d

a. Calculate the firm's operating cycle and h. What is the dollar value of inventory held by the firm? e. If the firm could reduce the average age of its invente goods sold of $2.4 million. 73 days to 63 by how much would it reduce its dollar investme Mulriple changes in cash conversion c t in working capital? 0s day cycle Garrett Industries turns over its s times cach year; it has an average collection period of 45 days ain ment period of 30 days. The firm's annual sales are $3lnAara difference in the investment per dollar of sales in inventory, receivables ables, and assume a 365-day year. P14-3 Pay. there is no and pay me operating expenditure, a. Calculate the firm's cash conversion cycle, its daily cash operatin needed to support its cash conversion cycle and the amount of resources b. Find the firm's cash conversion cycle and resource investment requirement f if it makes the following changes simultaneously (1) Shortens the average age of inventory by 5 days. 2) Speeds the collection of accounts receivable by an average of 10 da (3) Extends the average payment period by 10 days. ays c. If the firm pays 13% for its resource investment, by how much, if anything, d. If the annual cost of achieving the profit in part c is $35,000, what action would Aggressive versus conservative seasonal funding strategy could it increase its annual profit as a result of the changes in part b you recommend to the firm? Why? P14-4 its total funds requirements for the coming year Dynabase Tool h as as shown in the following table