FIN 370 Course Great Wisdom / tutorialrank.com FIN 370 Course Great Wisdom / tutorialrank.com | Page 20
Accepting a supplier’ s discount for early payment decreases the cash cycle.
Increasing the accounts payable period increases the cash cycle.
The longer the cash cycle, the more likely a firm will need external financing.
The cash cycle can exceed the operating cycle if the payables period is equal to zero.
Offering early payment discounts to customers will tend to increase the cash cycle.
Precise Machinery is analyzing a proposed project. The company expects to sell 2100 units give or take 5 percent. The expected variable cost per unit is $ 260 and the expected fixed costs are $ 589,000. Cost estimates are considered accurate within a plus or minus 4 percent range. The depreciation expense is $ 129,000. The sales price is estimated at $ 750 per unit, give or take 2 percent. The tax rate is 35 percent. The company is conducting a sensitivity analysis on the sales price using a sales price estimate of $ 755. What is the operating cash flow based on this analysis?
Accepting a supplier’ s discount for early payment decreases the cash cycle.
Increasing the accounts payable period increases the cash cycle.
The longer the cash cycle, the more likely a firm will need external financing.
The cash cycle can exceed the operating cycle if the payables period is equal to zero.
Offering early payment discounts to customers will tend to increase the cash cycle.
Precise Machinery is analyzing a proposed project. The company expects to sell 2100 units give or take 5 percent. The expected variable cost per unit is $ 260 and the expected fixed costs are $ 589,000. Cost estimates are considered accurate within a plus or minus 4 percent range. The depreciation expense is $ 129,000. The sales price is estimated at $ 750 per unit, give or take 2 percent. The tax rate is 35 percent. The company is conducting a sensitivity analysis on the sales price using a sales price estimate of $ 755. What is the operating cash flow based on this analysis?