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Sandhill, Inc., is considering opening up a new convenience store in downtown New York City. The expected annual revenue at the new store is $820,000.
Sandhill, Inc., is considering opening up a new convenience store in downtown New York City. The expected annual revenue at the new store is $820,000. To estimate the increase in working capital, analysts estimate that for firms in the same industry the ratio of cash and cash equivalents to revenue is 0.03 and the ratios of receivables, inventories, and payables to revenue are 0.05,0.10, and 0.04, respectively. Applying these industry estimates Sandhill, Inc., what is the expected incremental cash flow related to working capital when the store is opened
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