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Value Added Inc. Buy $ 21 million of Sow's ears at the beginning of January but...

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Finance

Value Added Inc. Buy $ 21 million of Sow's ears at the beginningof January but doesn't pay immediately the bill in March itprocesses the ears into silk purses, which it sells for 22 millionin February, however it will not collect payment on the sale untilApril. What is firm net income in February? What is the net incomein March? What is the firm investment in working capital inJanuary? What is the net new investment in working capital inApril? What is the firm's cash flow in January,February? What isthe cash flow in March, April/

Answer & Explanation Solved by verified expert
4.2 Ratings (780 Votes)
Based on information given calculations are as belowAnswer 1Net income in February Sales in February Cost ofgoods sold 22 million    See Answer
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Transcribed Image Text

Value Added Inc. Buy $ 21 million of Sow's ears at the beginningof January but doesn't pay immediately the bill in March itprocesses the ears into silk purses, which it sells for 22 millionin February, however it will not collect payment on the sale untilApril. What is firm net income in February? What is the net incomein March? What is the firm investment in working capital inJanuary? What is the net new investment in working capital inApril? What is the firm's cash flow in January,February? What isthe cash flow in March, April/

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