FIN 515 Week 7 Homework Assignment

# FIN 515 Week 7 Homework Assignment

J
Asked by 2 years ago
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Homework Assignment

16-1 Cash Management

Williams & Sons last year reported sales of 10 million and an inventory turnover ratio of 2. The company is now adopting a new inventory system. If the new system is able to reduce the firm's inventory level and increase the firm's inventory turnover ratio to 5 while maintaining the same level of sales, how much cash will be freed up?

Ans:

Inventory Sales / inventory turnover ratio

10 million/2 5 million

Inventory Sales / inventory turnover ration

10 million / 5 2 million

Cash that will be freed up 5 million - 2 million 3 million

(16-2) Receivables Investment

Medwig Corporation has a DSO of 17 days. The company averages 3,500 in credit sales each day. What are the company's average accounts receivable?

Ans:

AR...

FIN 515
jacob

### 1 Answer

J
Answered by 2 years ago
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Excerpt from file: HomeworkAssignment 161CashManagement Williams&Sonslastyearreportedsalesof10millionandaninventoryturnoverratioof2. Thecompanyisnowadoptinganewinventorysystem.Ifthenewsystemisabletoreduce the firms inventory level and increase the firms inventory turnover ratio to 5 while

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Asked: 2 years ago