Banana Supplies, Inc. has P5 million in inventory and P2 million in accounts receivable. Its average daily sales are P100,000. The company has P1.5 million in accounts payable. Its average daily purchases are P50,000. What is the length of the company’s inventory conversion period? (Use 360 days.)

Banana Supplies, Inc. has P5 million in inventory and P2 million in accounts receivable. Its average daily sales are P100,000. The company has P1.5 million in accounts payable. Its average daily purchases are P50,000. What is the length of the company’s cash conversion period? (Use 360 days.)

Orange Company sells on terms 3/10, net 30. Total sales for the year are P900,000. Forty percent of the customers pay on the tenth day and take discounts; the other 60 percent pay, on average, 45 days after their purchases. What is the average amount of receivables?

What is the economic order quantity for the following inventory policy: A firm sells 32,000 bags of premium sugar per year. The cost per order is P200 and the firm experiences a carrying cost of P0.80 per bag?

Durable Furniture Company uses about 200,000 yards of a particular fabric each year. The fabric costs P25 per yard. The current policy is to order the fabric four times a year. Incremental ordering costs are about P200 per order, and incremental carrying costs are about P0.75 per yard, much of which represents the opportunity costs of the funds tied up in inventory. How much total costs are associated with the current inventory policy?

What are the expected annual savings from a lock-box system that collects 20 checks per day averaging P10,000 each and reduces mailing and processing time by 2.5 and 1.5 days, respectively, if the annual interest is 5 percent?

The Camp Company has an inventory conversion period of 60 days, a receivable conversion period of 30 days and a payable turnover of 45 days. The Camp’s variable cost ratio is 60% and annual fixed costs of P600,000. The current cost of capital for Camp is 12%.

If Camp’s annual sales are P3,375,000 and all sales are on credit, what is the firm’s carrying costs on accounts receivable, using 360 days year?

A computer plans to tighten its credit policy. The new policy will decrease the average number of days in collection from 75 to 50 days and reduce the ratio of credit sales to total revenue from 70% to 60%. The company estimates that projected sales would be 5% less if the proposed new credit policy were implemented. The firm’s short-term interest cost is 10%. Projected sales for the coming year are P50 million.

Assume a 360-day year, calculate the peso impact on accounts receivable of this proposed change in credit policy?

Casie Company turns out 200 calculators a day at a cost of P250 per calculator for materials and variable conversion cost. It takes the firm 18 days to convert raw materials into calculator. Casie’s usual credit terms extended to its customers is 30 days, and the firm generally pays its suppliers in 20 days. If the foregoing cycles are constant, what amount of working capital must Casie Company finance?