What interest cost on the cash required to finance company

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Reference no: EM132907547

Rebecca Co. has the following selected information from its most recent annual financial statements:

                                              20X8 $                   20X7 $

Accounts receivable           223,400             226,700

Inventories                        121,700            151,600

Accounts payable                177,400            153,900

Sales (all on credit)               779,800          798,300

Cost of goods sold                 350,910           359,235

Operating expenses                   77,400         78,900

  • Operating expenses include depreciation and amortization of $10,500 in 20X8 and $10,100 in 20X7. The company pays 8% annual interest on borrowings from its bank.

Problem 1: What is the interest cost on the cash required to finance the company's estimated cash conversion cycle in 20X8? (For calculations, use 365 days in a year and round all calculations to the nearest day.)

a) $17,433

b) $18,117

c) $22,221

d) $12,819

Reference no: EM132907547

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