Homework Answers
Answer : Correct Option is C.) Less the firm must invest in Working Capital
Reason :
Accounts Payable period meand the time taken by the entity to pay its creditors . Accounts Payable Period has inverse relationship with cash conversion cycle. The longer the accounts payable period the shorter is the cash conversion cycle. If the accounts payable period is long means firm is making payment late which means availability of cash with the entity which lowers the requirement of working capital This is a source of cash . Thus longer the firm's accounts payable period Less the firm must invest in Working Capital.
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7. The longer the firm's accounts payable period, the: A. longer the firm's cash cycle. B....
2. The operating cycle is based on the: a) Cash cycle plus Accounts Receivable period b)...
2. The operating cycle is based on the: a) Cash cycle plus Accounts Receivable period b) Inventory period plus Accounts Receivable period c) Accounts Payable period minus Cash cycle d) Accounts Payable period minus Accounts Receivable period PLEASE HELP WIHT THE QUESTION
Which of the following statements is FALSE? OA. The firm's cash cycle is the average length...
Which of the following statements is FALSE? OA. The firm's cash cycle is the average length of time between when a firm originally purchases its inventory and when it receives the cash back from selling its product. O B. If the firm pays cash for its inventory, the firm's operating cycle is identical to the firm's cash cycle O C. The main components of net working capital are cash, inventory, receivables, and payables. O D. Working capital includes the cash...
If a company’s account payable period is longer than its operating cycle, then which of the...
If a company’s account payable period is longer than its operating cycle, then which of the following is most likely to be true: A) the company can avoid paying corporate taxes on earnings retained as cash. B) the company’s future cash flows will increase at a steady rate. C) the company’s cash cycle is negative D) the company pays for its inventory before it receives payments for its sales E) the company’s cash cycle is longer than its operating cycle.
Does an increase in a firm's cash cycle necessarily mean that a firm is managing its...
Does an increase in a firm's cash cycle necessarily mean that a firm is managing its cash poorly? (Select all of the choices below that apply.) A. No. An increase in a firm's cash cycle does not necessarily mean that the firm is managing its cash poorly The increase may be due to a conscious management decision. For example, a firm may decide to increase its inventory in order if it has been experiencing excessive stock-outs. All else equal, this...
Blauser's started the year with $280 in cash, $924 in inventory, $361 in accounts payable, $1,687...
Blauser's started the year with $280 in cash, $924 in inventory, $361 in accounts payable, $1,687 in equipment, and $414 in accounts receivable. At year's end, the firm had $311 in cash, $1,594 in equipment, $1,003 in inventory, $426 in accounts receivable, and $398 in accounts payable. What was the change in net working capital during the year? A. -$860 B $191 C $85 D -$94 E -$206
10. If a company's account payable period is longer than its operating cycle, then which of...
10. If a company's account payable period is longer than its operating cycle, then which of the following is most likely to be true: A) the company can avoid paying corporate taxes on earnings retained as cash. B) the company's future cash flows will increase at a steady rate. C) the company's cash cycle is negative D) the company pays for its inventory before it receives payments for its sales E) the company's cash cycle is longer than its operating...
10. If a company's account payable period is longer than its operating cycle, then which of...
10. If a company's account payable period is longer than its operating cycle, then which of the following is most likely to be true: A) the company can avoid paying corporate taxes on earnings retained as cash. B) the company's future cash flows will increase at a steady rate. C) the company's cash cycle is negative D) the company pays for its inventory before it receives payments for its sales E) the company's cash cycle is longer than its operating...
Suppose the cash cycle is 85 days, the accounts payable period is 10 days, and the...
Suppose the cash cycle is 85 days, the accounts payable period is 10 days, and the accounts receivable period is 50 days. How long is the inventory period? O 5 days O 35 days O 45 days O 40 days
JohnBoy Industries has a cash balance of $45,000, accounts payable of $125,000, inventory of $175,000, accounts...
JohnBoy Industries has a cash balance of $45,000, accounts payable of $125,000, inventory of $175,000, accounts receivable of $210,000, notes payable of $120,000, and accrued wages and taxes of $37,000. How much net working capital does the firm need to fund?
Annual sales $9,700,000 Cost of goods sold $7,275,000 Inventory $3,200,000 Accounts receivable $1,800,000 Accounts payable $2,400,000...
Annual sales $9,700,000 Cost of goods sold $7,275,000 Inventory $3,200,000 Accounts receivable $1,800,000 Accounts payable $2,400,000 Blue Ostrich's CFO is interested in determining the length of time funds are tied up in working capital. Use the information in the preceding table to complete the following table. (Note: Use 365 days as the length of a year in all calculations, and round all values to two decimal places.) Value Inventory conversion period Average collection period Payables deferral period Cash conversion cycle...
Which of the following statements is FALSE? OA. The firm's cash cycle is the average length of time between when a firm originally purchases its inventory and when it receives the cash back from selling its product. O B. If the firm pays cash for its inventory, the firm's operating cycle is identical to the firm's cash cycle O C. The main components of net working capital are cash, inventory, receivables, and payables. O D. Working capital includes the cash...
Does an increase in a firm's cash cycle necessarily mean that a firm is managing its cash poorly? (Select all of the choices below that apply.) A. No. An increase in a firm's cash cycle does not necessarily mean that the firm is managing its cash poorly The increase may be due to a conscious management decision. For example, a firm may decide to increase its inventory in order if it has been experiencing excessive stock-outs. All else equal, this...
10. If a company's account payable period is longer than its operating cycle, then which of the following is most likely to be true: A) the company can avoid paying corporate taxes on earnings retained as cash. B) the company's future cash flows will increase at a steady rate. C) the company's cash cycle is negative D) the company pays for its inventory before it receives payments for its sales E) the company's cash cycle is longer than its operating...
10. If a company's account payable period is longer than its operating cycle, then which of the following is most likely to be true: A) the company can avoid paying corporate taxes on earnings retained as cash. B) the company's future cash flows will increase at a steady rate. C) the company's cash cycle is negative D) the company pays for its inventory before it receives payments for its sales E) the company's cash cycle is longer than its operating...
Suppose the cash cycle is 85 days, the accounts payable period is 10 days, and the accounts receivable period is 50 days. How long is the inventory period? O 5 days O 35 days O 45 days O 40 days
Annual sales $9,700,000 Cost of goods sold $7,275,000 Inventory $3,200,000 Accounts receivable $1,800,000 Accounts payable $2,400,000 Blue Ostrich's CFO is interested in determining the length of time funds are tied up in working capital. Use the information in the preceding table to complete the following table. (Note: Use 365 days as the length of a year in all calculations, and round all values to two decimal places.) Value Inventory conversion period Average collection period Payables deferral period Cash conversion cycle...
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