1. Calculate the firm’s operating cycle.Single line text.

90 + 60 = 150

2. Calculate the firm’s cash conversion cycle.Single line text.

90 + 60 - 30 = 120

3. Calculate the amount of resources needed to support the firm’s cash conversion cycle.Single line
Inventory 30,000,000 x (90/365) = 7,397,260.27
AR 30,000,000 x (60/365) = 4,931,506.85
AP 30,000,000 x (30/365) = (2,465,753.42)
9,863,013.70

4. Calculate the firm’s operating cycleSingle line text.

45.63 + 60 = 106

5. Calculate the firm’s cash conversion cycle.Single line text.

45.63 + 60 - 35 = 71

6. Calculate the firm’s daily cash operating expenditure.Single line text.

3.5m / 365 = 9,589

7. How much resources must be invested to support its cash conversion cycle?
9,589 x 71 = 680,819

8. If the firm pays 14% for these resources, by how much would it increase its annual profits by fav
(9,589 x 20) x 14% = 26,849

9. Divide the firm’s monthly funds requirement into (1) a permanent component and
(2) a seasonal component, and find the monthly average for the permanent components
di ko gets pero nasa google 2,000,000

10. Divide the firm’s monthly funds requirement into (1) a permanent component and
(2) a seasonal component, and find the monthly average for the permanent components
4,000,000

11. Assuming that short-term funds cost 12% annually and that the cost of long term funds is 17%
Cost of short-term 4m x 12% = 480,000
Cost of long-term 2m x 17% = 340,000
820,000

12. Assuming that short-term funds cost 12% annually and that the cost of long term funds is 17%
Cost of long-term 14m x 17% = 2,380,000

13. How much long-term will the company have to issue next year?Single line text.
35,220

14. If the operations are not in full capacity, what will be your answer?Single line text.
5,220

15. Under these conditions, use the AFN equation to determine the amount of additional funds
Barnsdale would require during the 1st year if sales grow at a rate of 20% per year.
5,400,000

16. Under these conditions, use the AFN equation to determine the amount of additional funds
Barnsdale would require during the 2nd year if sales grow at a rate of 20% per year.
5,400,000

17. How much is the optimal transaction size?

C*=√(2 (200,000)
= 20,000
(50))/(5%)

18. How much is the average cash balance?

20,000/2 = 10,000

19. How much is the annual holding cost as a result of keeping cash in bank?
10,000 x 5% = 500

20. How many transactions should be there in a year?Single line text.

200,000/20,000 = 10
21. How much is the total annual cost of cash?
1,000

22. How much is the average daily disbursement float?

(5 + 4 + 1) x 2,000 = 20,000

23. How much is the average daily collection float?

(6 + 4 + 1) x 1,500 = 16,500

24. How much is the net float?Single line text.

20,000 - 16,500 = 3,500
on cycle.Single line text.

nual profits by favorably changing its current cash conversion cycle by 20 days

term funds is 17% annually, calculate the total cost of the aggressive strategySingle line text.
term funds is 17% annually, calculate the total cost of the conservative strategySingle line text.

dditional funds

dditional funds
e line text.