Parramore Corp has $19 million of sales, $2 million of inventories, $3 million of receivables, and...

70.2K

Verified Solution

Question

Finance

Parramore Corp has $19 million of sales, $2 million ofinventories, $3 million of receivables, and $1 million of payables.Its cost of goods sold is 80% of sales, and it finances workingcapital with bank loans at an 7% rate. Assume 365 days in year foryour calculations. Do not round intermediate steps.
What is Parramore's cash conversion cycle (CCC)? Do not roundintermediate calculations. Round your answer to two decimalplaces.
days

If Parramore could lower its inventories andreceivables by 8% each and increase its payables by 8%, all withoutaffecting sales or cost of goods sold, what would be the new CCC?Do not round intermediate calculations. Round your answer to twodecimal places.
days

How much cash would be freed up, if Parramore couldlower its inventories and receivables by 8% each andincrease its payables by 8%, all without affecting sales or cost ofgoods sold? Do not round intermediate calculations. Round youranswer to the nearest cent. Write out your answer completely. ForExample, 13.2 million should be entered as 13,200,000.
$

By how much would pretax profits change, if Parramore couldlower its inventories and receivables by 8% each andincrease its payables by 8%, all without affecting sales or cost ofgoods sold? Do not round intermediate calculations. Round youranswer to the nearest cent. Write out your answer completely. ForExample, 13.2 million should be entered as 13,200,000.
$
*PLEASE MAKE SURE ALL ANSWERS ARE CORRECT AND LABELEDCLEARLY.*** I have gotten two wrong answers in the past before somake sure you're work is correct. please. I. will leave a. goodreview. if all answers are correct

Answer & Explanation Solved by verified expert

3.9 Ratings (417 Votes)

See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member

Transcribed Image Text

Parramore Corp has $19 million of sales, $2 million ofinventories, $3 million of receivables, and $1 million of payables.Its cost of goods sold is 80% of sales, and it finances workingcapital with bank loans at an 7% rate. Assume 365 days in year foryour calculations. Do not round intermediate steps.What is Parramore's cash conversion cycle (CCC)? Do not roundintermediate calculations. Round your answer to two decimalplaces. daysIf Parramore could lower its inventories andreceivables by 8% each and increase its payables by 8%, all withoutaffecting sales or cost of goods sold, what would be the new CCC?Do not round intermediate calculations. Round your answer to twodecimal places. daysHow much cash would be freed up, if Parramore couldlower its inventories and receivables by 8% each andincrease its payables by 8%, all without affecting sales or cost ofgoods sold? Do not round intermediate calculations. Round youranswer to the nearest cent. Write out your answer completely. ForExample, 13.2 million should be entered as 13,200,000.$By how much would pretax profits change, if Parramore couldlower its inventories and receivables by 8% each andincrease its payables by 8%, all without affecting sales or cost ofgoods sold? Do not round intermediate calculations. Round youranswer to the nearest cent. Write out your answer completely. ForExample, 13.2 million should be entered as 13,200,000.$***PLEASE MAKE SURE ALL ANSWERS ARE CORRECT AND LABELEDCLEARLY.***** I have gotten two wrong answers in the past before somake sure you're work is correct. please. I. will leave a. goodreview. if all answers are correct