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The NPV of your firms annual sales at the current cash conversion cycle equal $500,000. You estimate that by shortening the cash conversion cycle the
The NPV of your firms annual sales at the current cash conversion cycle equal $500,000. You estimate that by shortening the cash conversion cycle the NPV of annual sales will increase to $700,000. Assuming that the annual change in NPV continues in perpetuity, what is the change in firm value from shortening the cash conversion cycle? Assume a discount rate of 5%.
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