Zane Corporation has an inventory conversion period of 64 days, an average collection period of 28 days, and a payables deferral period of 41 days. a. What is the length of the cash conversion cycle? b. If Zane’s annual sales are $2,578,235 and all sales are on credit, what is the investment in accounts receivable? c. How many times per year does Zane turn over its inventory? Assume that the cost of goods sold is 75% of sales. Use sales in the numerator to calculate the turnover ratio.

Leyton Lumber Company has sales of $12 million per year, all on credit terms calling for payment within 30 days, and its accounts receivable are$1.5 million. What is Leyton’s DSO, what would it be if all customers paid on time, and how much capital would be released if Leyton could take action that led to on-time payments?

Pasha Corporation produces motorcycle batteries. Pasha turns out 1,400 batteries a day at a cost of $7 per battery for materials and labor. It takes the firm 22 days to convert raw materials into a battery. Pasha allows its customers 40 days in which to pay for the batteries, and the firm generally pays its suppliers in 30 days. a. What is the length of Pasha’s cash conversion cycle? b. At a steady state in which Pasha produces 1,400 batteries a day, what amount of working capital must it finance? c. By what amount could Pasha reduce its working capital financing needs if it was able to stretch its payables deferral period to 33 days? d. Pasha’s management is trying to analyze the effect of a proposed new production process on its working capital investment. The new production process would allow Pasha to decrease its inventory conversion period to 17 days and to increase its daily production to 2,400 batteries. However, the new process would cause the cost of materials and labor to increase to$12. Assuming the change does not affect the average collection period (40 days) or the payables deferral period (30 days), what will be the length of its cash conversion cycle and its working capital financing requirement if the new production process is implemented?

Answer the following.

Zane Corporation has an inventory conversion period of 64 days, an average collection period of 28 days, and a payables deferral period of 41 days.

a. What is the length of the cash conversion cycle?

b. If Zane's annual sales are 2,578,235 dollars and all sales are on credit, what is the investment in accounts receivable?

c. How many times per year does Zane turn over its inventory? Assume that the cost of goods sold is 75 percent of sales. Use sales in the numerator to calculate the turnover ratio.

Chastain Corporation is trying to determine the effect of its inventory turnover ratio and days sales outstanding (DSO) on its cash conversion cycle. Chastain’s 2016 sales (all on credit) were $121,000; its cost of goods sold is 80% of sales; and it earned a net profit of 2%, or$2,420. It turned over its inventory 7 times during the year, and its DSO was 37 days. The firm had fixed assets totaling $42,000. Chastain’s payables deferral period is 35 days. a. Calculate Chastain’s cash conversion cycle. b. Assuming Chastain holds negligible amounts of cash and marketable securities, calculate its total assets turnover and ROA. c. Suppose Chastain’s managers believe that the inventory turnover can be raised to 9.9 times. What would Chastain’s cash conversion cycle, total assets turnover, and ROA have been if the inventory turnover had been 9.9 for 2016?

What is a cash budget, and how can this statement be used to help reduce the amount of cash that a firm needs to carry? What are the advantages and disadvantages of daily over monthly cash budgets, and how might a cash budget be used when a firm is negotiating a loan from its bank?

Answer the following.

Lancaster Lumber buys 8 million dollars of materials (net of discounts) on terms of 3 / 5, net 55, and it currently pays on the 5th day and takes discounts. Lancaster plans to expand, which will require additional financing. If Lancaster decides to forgo discounts, how much additional credit could it obtain, and what would be the nominal and effective cost of that credit? If the company could get the funds from a bank at a rate of 9 percent, interest paid monthly, based on a 365 -day year, what would be the effective cost of the bank loan? Should Lancaster use bank debt or additional trade credit? Explain.

The Saliford Corporation has an inventory conversion period of 60 days, a receivables collection period of 36 days, and a payables deferral period of 24 days.

What is the length of the firm's cash conversion cycle?

What is the relationship between insurance and successful financial management?

Why are accruals called spontaneous sources of funds, what are their costs, and why don’t firms use more of them?

Why is vaporization endothermic? Why is condensation exothermic?

Define each of the following loan terms, and explain how they are related to one another: the prime rate, the rate on commercial paper, the simple interest rate on a bank loan calling for interest to be paid monthly, and the rate on an installment loan based on add-on interest. If the stated rate on each of these loans was 4%, would they all have equal, effective annual rates? Explain.

What are the two definitions of cash, and why do corporate treasurers often use the second definition?

Decide whether the given matrix is symmetric.

$$\left[\begin{array}{ll}{2} & {0} \\ {1} & {2}\end{array}\right]$$