Use the following financial values to answer the questions below. Revenues = $4,200,000 and COGS = 45% of revenues. Receivables = $1,100,000, payables = $700,000 and inventory is $800,000.
a. C alculate the operating cycle.
b. C alculate the CCC .
c. W ith all else constant, what level of payables will allow the firm to have a CCC of 0 days?
d. W ith all else constant, what level of inventory will allow the firm to have a CCC of 0 days?
e. W ith all else constant, what level of receivables will allow the firm to have a CCC of 0 days? Is your answer feasible?