Question

In: Finance

1- Parramore Corp has $18 million of sales, $3 million of inventories, $2 million of receivables,...

1-

Parramore Corp has $18 million of sales, $3 million of inventories, $2 million of receivables, and $3 million of payables. Its cost of goods sold is 80% of sales, and it finances working capital with bank loans at an 6% rate. Assume 365 days in year for your calculations. Do not round intermediate steps.

  1. What is Parramore's cash conversion cycle (CCC)? Do not round intermediate calculations. Round your answer to two decimal places.
    days

  2. If Parramore could lower its inventories and receivables by 9% each and increase its payables by 9%, all without affecting sales or cost of goods sold, what would be the new CCC? Do not round intermediate calculations. Round your answer to two decimal place.
       days

  3. How much cash would be freed up, if Parramore could lower its inventories and receivables by 9% each and increase its payables by 9%, all without affecting sales or cost of goods sold? Do not round intermediate calculations. Round your answer to the nearest cent. Write out your answer completely. For Example, 13.2 million should be entered as 13,200,000.
    $

  4. By how much would pretax profits change, if Parramore could lower its inventories and receivables by 9% each and increase its payables by 9%, all without affecting sales or cost of goods sold? Do not round intermediate calculations. Round your answer to the nearest cent. Write out your answer completely. For Example, 13.2 million should be entered as 13,200,000.
    $

Solutions

Expert Solution

Answer is attached below :-


Related Solutions

Parramore Corp has $18 million of sales, $3 million of inventories, $3 million of receivables, and...
Parramore Corp has $18 million of sales, $3 million of inventories, $3 million of receivables, and $2 million of payables. Its cost of goods sold is 70% of sales, and it finances working capital with bank loans at an 8% rate. Assume 365 days in year for your calculations. Do not round intermediate steps. What is Parramore's cash conversion cycle (CCC)? Do not round intermediate calculations. Round your answer to two decimal places. If Parramore could lower its inventories and...
Parramore Corp has $20 million of sales, $3 million of inventories, $2 million of receivables, and...
Parramore Corp has $20 million of sales, $3 million of inventories, $2 million of receivables, and $1 million of payables. Its cost of goods sold is 75% of sales, and it finances working capital with bank loans at an 7% rate. Assume 365 days in year for your calculations. Do not round intermediate steps. 1-What is Parramore's cash conversion cycle (CCC)? Do not round intermediate calculations. Round your answer to two decimal places. days 2-If Parramore could lower its inventories...
Parramore Corp has $10 million of sales, $3 million of inventories, $2 million of receivables, and...
Parramore Corp has $10 million of sales, $3 million of inventories, $2 million of receivables, and $3 million of payables. Its cost of goods sold is 75% of sales, and it finances working capital with bank loans at a 6% rate. Assume 365 days in year for your calculations. What is Parramore's cash conversion cycle (CCC)? Do not round intermediate calculations. Round your answer to two decimal places.   days If Parramore could lower its inventories and receivables by 11% each...
Parramore Corp has $17 million of sales, $2 million of inventories, $3 million of receivables, and...
Parramore Corp has $17 million of sales, $2 million of inventories, $3 million of receivables, and $3 million of payables. Its cost of goods sold is 85% of sales, and it finances working capital with bank loans at an 7% rate. Assume 365 days in year for your calculations. Do not round intermediate steps. a. What is Parramore's cash conversion cycle (CCC)? Do not round intermediate calculations. Round your answer to two decimal places. b. If Parramore could lower its...
Parramore Corp has $17 million of sales, $3 million of inventories, $2 million of receivables, and...
Parramore Corp has $17 million of sales, $3 million of inventories, $2 million of receivables, and $1 million of payables. Its cost of goods sold is 70% of sales, and it finances working capital with bank loans at an 9% rate. Assume 365 days in year for your calculations. Do not round intermediate steps. What is Parramore's cash conversion cycle (CCC)? Do not round intermediate calculations. Round your answer to two decimal places.   days If Parramore could lower its inventories...
Parramore Corp has $16 million of sales, $3 million of inventories, $2 million of receivables, and...
Parramore Corp has $16 million of sales, $3 million of inventories, $2 million of receivables, and $3 million of payables. Its cost of goods sold is 65% of sales, and it finances working capital with bank loans at an 9% rate. Assume 365 days in year for your calculations. Do not round intermediate steps. What is Parramore's cash conversion cycle (CCC)? Do not round intermediate calculations. Round your answer to two decimal places.   days If Parramore could lower its inventories...
Parramore Corp has $10 million of sales, $2 million of inventories, $3 million of receivables, and...
Parramore Corp has $10 million of sales, $2 million of inventories, $3 million of receivables, and $1 million of payables. Its cost of goods sold is 65% of sales, and it finances working capital with bank loans at an 6% rate. Assume 365 days in year for your calculations. Do not round intermediate steps. What is Parramore's cash conversion cycle (CCC)? Do not round intermediate calculations. Round your answer to two decimal places. days If Parramore could lower its inventories...
Parramore Corp has $13 million of sales, $3 million of inventories, $2 million of receivables, and...
Parramore Corp has $13 million of sales, $3 million of inventories, $2 million of receivables, and $2 million of payables. Its cost of goods sold is 85% of sales, and it finances working capital with bank loans at an 9% rate. Assume 365 days in year for your calculations. Do not round intermediate steps. What is Parramore's cash conversion cycle (CCC)? Do not round intermediate calculations. Round your answer to two decimal places.   days If Parramore could lower its inventories...
Parramore Corp has $12 million of sales, $2 million of inventories, $3 million of receivables, and...
Parramore Corp has $12 million of sales, $2 million of inventories, $3 million of receivables, and $3 million of payables. Its cost of goods sold is 80% of sales, and it finances working capital with bank loans at an 6% rate. Assume 365 days in year for your calculations. Do not round intermediate steps. What is Parramore's cash conversion cycle (CCC)? Do not round intermediate calculations. Round your answer to two decimal places.   days If Parramore could lower its inventories...
Parramore Corp has $19 million of sales, $2 million of inventories, $3 million of receivables, and...
Parramore Corp has $19 million of sales, $2 million of inventories, $3 million of receivables, and $1 million of payables. Its cost of goods sold is 80% of sales, and it finances working capital with bank loans at an 7% rate. Assume 365 days in year for your calculations. Do not round intermediate steps. What is Parramore's cash conversion cycle (CCC)? Do not round intermediate calculations. Round your answer to two decimal places.   days If Parramore could lower its inventories...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT