The following information about the operations of hancock, Financial Management

The following information about the operations of hancock

The following information about the operations of Hancock Company is available.

Annual sales $185 million

Cost of goods sold $125 million

Average accounts receivable $25 million

Average accounts payable $15 million

Average inventory $30 million

Cost of capital 12%

A) Find the NPV of its operating cycle.

(B) What is the new NPV if Hancock can delay the payments by 2 days and make the collections 2 days earlier? By comparing the answers to (A) and (B), can you tell if the company made the right move?

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Financial Management: The following information about the operations of hancock

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Financial Management: The following information about the operations of hancock

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