Financial Management

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Question

A manufacturing company pays accounts payable on the tenth day after purchase. The average collection period is 30 day and the average age of inventory is 40 days. The firm currently has annual sales of about 18 million $ and purchases of 14 million $. The firm is considering a plan that would stretch its accounts payable by 20 days. If the firm pays 12 % per year for its resource investment, what annual savings can can it realize by this plan. Assume a 360-day year. Jan 18 2014 06:29 AM

 

Solution ID:609075 | This paper was updated on 26-Nov-2015

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