(1) XYZ corporation has an inventory conversion period of 60 days, an average collection period...
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(1) XYZ corporation has an inventory conversion period of 60 days, an average collection period of 38 days and a payables deferral period of 30 days. Assume that the cost of goods sold is 75% of sales. a) What is the length of firm's cash conversion cycle? (1 marks) b) If the annual sales are $3421875 and all sales are on credit, what is the firm's investment in accounts receivable? (3 marks) c) How many times per year does the company turn over it's inventory? (3 marks) I a Q2) ABC Corporation needs to raise $500000 for 1 year to supply working capital to a new store. The company buys from it's suppliers on terms 3/10, net 90 and it currently pays on the 104 day and takes discounts. However it could forgo the discounts, pay on the 90 day, and thereby obtain the needed $500000. What is the effective annual interest rate of this trade credit
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