Question # 1:

The extent of the financing is directly correlated to the useful life of an asset being financed, justify.

During the year the following changes were observed.

(I.) Inventory period increased by 12 days

(II.) Receivables period decreased by 6 days

(III.) Accounts payable period increased by 4 days

Find the net change in cash conversion cycle

During the year the following changes were observed

Inventory period increased by 12 days

Receivables period decreased by 6 days

Accounts payable period increased by 4 days

Find the net change in cash conversion cycle.

A firm has Rs. 50 million and Rs. 60 million credit sales during the first two quarters of the year. 70% of the account receivables are collected in the same quarter and the balance in the next quarter. What will be the total collection for the firm in the second quarter?

If a firm determined to increase its collection from its clients by diminishing the receivables period and held in reserve the payable period and inventory period the same. Briefly explain its effect.

A firm sells its Rs.1, 000,000 receivables to a factor for Rs.960, 000. Average collection period is one month. Calculate the effective annual rate.