Question

On an average ,accounts receivable is collected after 80 days , inventories have an average of 100 days and Accounts payable are paid approximately 60 days after they arise. - The firm spends a total of Rs.16,20,000 annually at a constant rate . - It can earn 10 % on investments . Calculate a) Cash Cycle b) Cash turnover assuming 360 days in a year c) Minimum amount of cash to be maintained to meet payments when they become due . d) Savings by reducing the average age of inventories to 70 days

Answer 1

Explanation:

Since funds have a cost, the company has to pay huge amount as ... Accounts payables are analyzed by the average number of days it.