Kira Wang produces 20,000 vases a day at a cost of RM8 per vase for materials and takes 25 days to produce a vase and allows its customers 35 days to pay labour. The company are generally pays its supplier in 40 days. (Assume a 360-days per year). Calculate the film's operating cycle and the cash conversion cycle. a. b. Calculate the effect on the company's annual profits if it current cash conversion cycle is reduced by 10 days .The company cost of financing for those resources is 10% and initial investment for the company is RM3,200,000. C. Explain TWO (2) ways to reduce cash conversion cycle.

Kira Wang produces 20,000 vases a day at a cost of RM8 per vase for materials and takes 25 days to produce a vase and allows its customers 35 days to pay labour. The company are generally pays its supplier in 40 days. (Assume a 360-days per year). Calculate the film's operating cycle and the cash conversion cycle. a. b. Calculate the effect on the company's annual profits if it current cash conversion cycle is reduced by 10 days .The company cost of financing for those resources is 10% and initial investment for the company is RM3,200,000. C. Explain TWO (2) ways to reduce cash conversion cycle.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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