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Q1. If Accounts Receivable days 75 days, Accounts Payable days 30 days, and Inventory days 50 days, calculate the Cash Conversion Cycle. Q2. Raw material in stock 2 weeks, Work in Process 4 weeks, and Finished goods in store 2 weeks. Customers take 4 weeks to settle dues. You have taken 4 weeks' credit from your suppliers. Calculate the Cash Operating Cycle. Q3. A condensed balance sheet for Durham Corporation prepared at the end of the year appears below: Assets Liabilities Cash $55,000 Note payable $40,000 Accounts Receivable $155,000 Accounts payable $110,000 Inventory $270,000 Long-term loan $330,000 Prepaid expenses $60,000 Capital stock ($5) $300,000 Plant assets $660,000 Retained earnings $420,000 Total $1,200,000 Total $1,200,000 Find the Net Working Capital of the company. Q4: The Prestopino Corporation produces motorcycle batteries. Prestopino turns out 1,500 batteries a day at a cost of $6 per battery for materials and labor. It takes the firm 22 days to convert raw materials into a battery. Prestopino 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 Prestopino's cash conversion cycle? b. By what amount could Prestopino reduce its working capital financing needs if it was able to stretch its payables deferral period to 35 days? Q5. Primrose Corp has $15 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 8% rate. What is Primrose's cash conversion cycle (CCC)? If Primrose could lower its inventories and receivables by 10% each and increase its payables by 10%, all without affecting sales or cost of goods sold, what would be the new CCC?

Q1. If Accounts Receivable days 75 days, Accounts Payable days 30 days, and Inventory days 50 days, calculate the Cash Conversion Cycle.
Q2. Raw material in stock 2 weeks, Work in Process 4 weeks, and Finished goods in store 2 weeks. Customers take 4 weeks to settle dues. You have taken 4 weeks' credit from your suppliers. Calculate the Cash Operating Cycle.
Q3. A condensed balance sheet for Durham Corporation prepared at the end of the year appears below:
Assets Liabilities
Cash $55,000 Note payable $40,000
Accounts Receivable $155,000 Accounts payable $110,000
Inventory $270,000 Long-term loan $330,000
Prepaid expenses $60,000 Capital stock ($5) $300,000
Plant assets $660,000 Retained earnings $420,000
Total $1,200,000 Total $1,200,000
Find the Net Working Capital of the company.
Q4: The Prestopino Corporation produces motorcycle batteries. Prestopino turns out 1,500 batteries a day at a cost of $6 per battery for materials and labor. It takes the firm 22 days to convert raw materials into a battery. Prestopino 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 Prestopino's cash conversion cycle?
b. By what amount could Prestopino reduce its working capital financing needs if it was able to stretch its payables deferral period to 35 days?
Q5. Primrose Corp has $15 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 8% rate. What is Primrose's cash conversion cycle (CCC)? If Primrose could lower its inventories and receivables by 10% each and increase its payables by 10%, all without affecting sales or cost of goods sold, what would be the new CCC?

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