Pretty Lady Cosmetic Product has an average production process time of forty days. Finished goods...

Question

Pretty Lady Cosmetic Product has an average production process time of forty days. Finished goods are
kept on hand for an average of fifteen days before they are sold. Accounts receivable are outstanding an
average of thirty-five days, and the firm receives forty days of credit on its purchases from suppliers.
a. Estimate the average length of the firms short-term operating cycle. How often would the cycle turn
over in a year?
. Assume net sales of $1,200,000 and cost of goods sold of $900,000. Determine the average
investment in accounts...

David · Accepted Answer

Pretty Lady Cosmetic Product has an average production process time of forty days. Finished goods are 
kept on hand for an average of fifteen days before they are sold. Accounts receivable are outstanding an 
average of thirty-five days, and the firm receives forty days of credit on its purchases from suppliers. 
a. Estimate the average length of the firms short-term operating cycle. How often would the cycle turn 
over in a year? 
b. Assume net sales of $1,200,000 and cost of goods sold of $900,000.

Pretty Lady Cosmetic Product has an average production process time of forty days. Finished goods are kept on hand for an average of fifteen days before they are sold. Accounts receivable are...

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