Unformatted text preview: the new, incremental sales. • The firm can raise additional funds for investment in receivables at a nominal annual rate of 10 percent. If you implicitly include the cost of interest on the firm's incremental investment in receivables, then what is the expected change in after-tax profit (net income) if this change in credit policy is made? A. $22.66 B. $18.66 C. $24.66 D. $20.66 E. $16.66 11. Assume that for your company the average age of accounts receivable is 60 days, the average age of accounts payable is 45 days, and the average age of inventory is 72 days. Assuming a 365-day year, determine the length of the firm’s cash conversion cycle. A. 87 days B. 90 days C. 65 days D. 48 days E. 66 days...
View Full Document
- Spring '08
- Net Income, Generally Accepted Accounting Principles, average age