The Prestipino Corporation is a leading U.S Producer of automobile… The Prestipino Corpo

The Prestipino Corporation is a leading U.S Producer of automobile… The Prestipino Corporation is a leading U.S Producer of automobile batteries. Prestipino turns out 1,500 batteries a day at a cost of $6 per battery for materials and labour. It takes the firm 22 days to convert raw materials into a battery. They allow their customers 40 days to pay, and the firm generally pays its suppliers in 30 days. (a) What is the length of Prestipino’s cash conversion cycle?? You need to do the following exercises prior to coming to class.? Your answers will be collected at random in class twice during the semesterand count for 20% of your overall course mark.? Students who fail to hand in the exercises will be given a mark of 0.  3 (b) At a steady state in which Prestipino produces 1,500 batteries a day, what amount ofworking capital must it finance?(c) By what amount could Prestipino reduce its working capital finance needs if it wasable to stretch its payable deferral period to 35 days?(d) Management is trying to analyse the effect of a proposed new production process onthe working capital investment. The new production process would allow them todecrease its inventory conversion period to 20 days and to increase its daily productionto 1,800 batteries. However, the new process would cause the cost of materials andlabour to increase to $7. Assuming the change does not affect the receivablescollection period (40 days) or the payables deferral period (30 days), what will be thelength of the cash conversion cycle and the working capital finance requirement if thenew production process is implemented?   Accounting Business Managerial Accounting ACFI 2003 Share QuestionEmailCopy link