Avery Inc. has the following balance sheet: cash: 120k accounts receivable 950k

Question

Avery Inc. has the following balance sheet:
cash: 120k
accounts receivable 950k
inventories: 360k
---------------------------
total current assets: 1.430m

net fixed assets: 1.5
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total assets: 2.930m
=====================

accounts payable: 440k
notes payable: 500k
accruals: 300k
---------------------------
total current liabilities: 1.240m
long-term debt: 880k
total common equity: 810k
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total liabilities and equity: 2.930m
=====================

the firm's current cash conversion cycle is 34.47 days

if avery reduces their ccc to 18.25 days, the reduced accounts receivable and increased accounts payable will free up cash for the firm, how much cash will be freed?

a) 347,260.27
b) 357,123.29
c) 348,904.11
d) 362,054.79
e) 358,767.12

Explanation / Answer

the firm's current cash conversion cycle is 31.98 days

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