Answer to Question #7089 in Finance for LaMarcus Streeter
Average inventory = $75,000
Annual sales = $600,000
Annual cost of goods sold = $360,000
Average accounts receivable = $160,000
Average accounts payable = $25,000
a. 120.6 days
b. 126.9 days
c. 133.6 days
d. 140.6 days
e. 148.0 days
A maturity matching policy is when fixed assets and
permanent current assets are financed with long-term sources. as the minimum
balance that total assets approach is $320,000, and $260,000 of that is fixed
assets, permanent current assets are $60,000. The likely level of long-term
financing is $320,000.
Long-term debt financing = Permanent cash assets +
Permanent cash assets = Low end of total assets - Fixed assets
= $320,000 - $260,000 = $60,000.
Long-term debt financing = $60,000 +
$260,000 = $320,000.
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