Cash Conversion CycleCash Conversion Cycle(a)Enter figures belowInventory Conversion Period64daysAverage Collection Period28daysPayables Deferral Period41daysCash Conversion Cycle51days(b)Annual Sales$ 2,578,235.00divided into 365 days365daysAverage Sales per Day$ 7,063.6575Average Collection Period28daysInvestment in Receivables$ 197,782.41(c) Step 1: Inventory BalanceAnnual Sales$ 2,578,235.00Cost of Goods Sold75%percent of salesdivided into 365 days365daysInventory Conversion Period64days$ 5,297.74Inventory$ 339,055.56Step 2: Inventory Turnover RatioAnnual Sales$ 2,578,235.00Inventory$ 339,055.56Turnover Ratio7.60times a year(d)Competitor A88days54days30days112daysCompetitor B90days44days30days104days Additional Funds NeededAdditional Funds NeededLast year's Sales$ 5,000,000Sales to Increase (in percent)20%Total Liabilities and Equity = Assets$ 3,000,000Accounts Payable$ 300,000Notes Payable$ 600,000Accrued Liability$ 300,000Profit Margin3%Retained30%Required increase in Assets$ 600,000Spontaneous increase in Payables and Accruals$ 120,000Increase in Retained Earnings$ 54,000Assets/Sales60%Next year's Sales (forecasted) $ 6,000,000Change in Sales$ 1,000,000Additional Funds Needed$ 426,000 Cross-Exchange RateCross-Exchange Rate$1 to Israeli shekels3.58$1 to Japanese Yen109Cross-Exchange Rate30.45Yen/Shekel FV & PV Lump SumFuture ValuePresent ValueInterest RateInterest Rate# of Periods# of PeriodsStarting ValueLump Sum in the FutureFuture Lump Sum$ - 0Present Value$0 Required Interest RatesRequired Interest RatesPresent Valuein savingsFuture Valueneeded at retirementAdditional fundsNumber of PeriodsyearsRequired Interest RateERROR:#NUM! FV & PV Annuitya)Future Value of an Annuitya)Present Value of an AnnuityInterest RateInterest Rate# of Periods# of PeriodsPayments (per period)Payment per periodFuture Value$ - 0Present Value$0.00b)Future Value of an Annuityb)Present Value of an AnnuityInterest RateInterest Rate# of Periods# of PeriodsPayments (per period)Payment per periodFuture Value$ - 0Present Value$0.00c)Future Value of an Annuityc)Present Value of an AnnuityInterest RateInterest Rate# of Periods# of PeriodsPayments (per period)Payment per periodFuture Value$ - 0Present Value$0.00 Bond ValuationBond ValuationFace ValueYield to MaturityCoupon Bond CCoupon Bond ZYears to MaturityPrice of Bond CPrice of Bond Z4$0.00$0.003$0.00$0.002$0.00$0.001$0.00$0.000$0.00$0.00 YTM & YTCPrice of each of the three bondsBasic Input DataBond ABond BBond CYears to maturityCoupon ratePar valuePeriodic payment$0$0$0Yield to maturity9%9%9%Price$0.00$0.00$0.00Current Yield Bond ABond BBond CCurrent yield ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0! CAPM and Required ReturnCAPM and Required ReturnMarket Beta1.0Required ReturnRisk-Free RateMarket Premium0.00%Your CompanyRisk-Free Rate0.00%Market Premium0.00%Company BetaRequired Return0.00%Closet CompetitorRisk-Free Rate0.00%Market Premium0.00%Competitor's BetaRequired Retur.

1. Cash Conversion CycleCash Conversion Cycle(a)Enter figures
belowInventory Conversion Period64daysAverage Collection
Period28daysPayables Deferral Period41daysCash Conversion
Cycle51days(b)Annual Sales$ 2,578,235.00divided into 365
days365daysAverage Sales per Day$ 7,063.6575Average
Collection Period28daysInvestment in Receivables$
197,782.41(c) Step 1: Inventory BalanceAnnual Sales$
2,578,235.00Cost of Goods Sold75%percent of salesdivided into
365 days365daysInventory Conversion Period64days$
5,297.74Inventory$ 339,055.56Step 2: Inventory Turnover
RatioAnnual Sales$ 2,578,235.00Inventory$
339,055.56Turnover Ratio7.60times a year(d)Competitor
A88days54days30days112daysCompetitor
B90days44days30days104days
Additional Funds NeededAdditional Funds NeededLast year's
Sales$ 5,000,000Sales to Increase (in percent)20%Total
Liabilities and Equity = Assets$ 3,000,000Accounts Payable$
300,000Notes Payable$ 600,000Accrued Liability$
300,000Profit Margin3%Retained30%Required increase in
Assets$ 600,000Spontaneous increase in Payables and
Accruals$ 120,000Increase in Retained Earnings$
54,000Assets/Sales60%Next year's Sales (forecasted) $
6,000,000Change in Sales$ 1,000,000Additional Funds
Needed$ 426,000
Cross-Exchange RateCross-Exchange Rate$1 to Israeli
shekels3.58$1 to Japanese Yen109Cross-Exchange
Rate30.45Yen/Shekel
FV & PV Lump SumFuture ValuePresent ValueInterest
RateInterest Rate# of Periods# of PeriodsStarting ValueLump
Sum in the FutureFuture Lump Sum$ - 0Present Value$0
Required Interest RatesRequired Interest RatesPresent Valuein
savingsFuture Valueneeded at retirementAdditional
fundsNumber of PeriodsyearsRequired Interest
RateERROR:#NUM!

2. FV & PV Annuitya)Future Value of an Annuitya)Present Value
of an AnnuityInterest RateInterest Rate# of Periods# of
PeriodsPayments (per period)Payment per periodFuture Value$
- 0Present Value$0.00b)Future Value of an Annuityb)Present
Value of an AnnuityInterest RateInterest Rate# of Periods# of
PeriodsPayments (per period)Payment per periodFuture Value$
- 0Present Value$0.00c)Future Value of an Annuityc)Present
Value of an AnnuityInterest RateInterest Rate# of Periods# of
PeriodsPayments (per period)Payment per periodFuture Value$
- 0Present Value$0.00
Bond ValuationBond ValuationFace ValueYield to
MaturityCoupon Bond CCoupon Bond ZYears to MaturityPrice
of Bond CPrice of Bond
Z4$0.00$0.003$0.00$0.002$0.00$0.001$0.00$0.000$0.00$0.00
YTM & YTCPrice of each of the three bondsBasic Input
DataBond ABond BBond CYears to maturityCoupon ratePar
valuePeriodic payment$0$0$0Yield to
maturity9%9%9%Price$0.00$0.00$0.00Current Yield Bond
ABond BBond CCurrent yield
ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!
CAPM and Required ReturnCAPM and Required ReturnMarket
Beta1.0Required ReturnRisk-Free RateMarket
Premium0.00%Your CompanyRisk-Free Rate0.00%Market
Premium0.00%Company BetaRequired Return0.00%Closet
CompetitorRisk-Free Rate0.00%Market
Premium0.00%Competitor's BetaRequired
Return0.00%Difference in Required Return0.00%
Constant Growth ValueConstant Growth ValuationExpected
DividendConstant GrowthRequired Rate of ReturnCurrent Value
per ShareERROR:#DIV/0!
Non-Constant Growth ValNon-Constant Growth ValuationPaid
DividendNon-Constant Growth x 2 yearsConstant Growth
thereafterRequired Rate of ReturnCash Flow at Horizon or
Continuing DateERROR:#DIV/0!Horizon Timeline
Years0123Dividends$0.0000$0.0000$0.0000$0.0000ERROR:#D
IV/0!Cash FlowERROR:#DIV/0!Present

3. Value$0.0000ERROR:#DIV/0!$0.0000Intrinsic Stock
ValueERROR:#DIV/0!
WACCWeighted Average Cost of CapitalDebtCommon
EquityCost of DebtTax RateCurrent Stock PriceLast Dividend
PaidExpected Constant GrowthNext Dividend$ - 0Internal
EquityERROR:#DIV/0!WACCERROR:#DIV/0!
Capital BudgetingCapital Budgeting
CriteriaYear01234567Project AProject
BDifference$0$0$0$0$0$0$0$0WACC11%WACC18%NPV @
11%NPV @ 18%Project A$0.00Project A$0.00Project
B$0.00Project B$0.00IRR @ 11%Project
AERROR:#NUM!Project BERROR:#NUM!MIRR @ 11%MIRR
@ 18%Project AERROR:#DIV/0!Project
AERROR:#DIV/0!Project BERROR:#DIV/0!Project
BERROR:#DIV/0!Discount RateNPV-ANPV-
B0.0%$0$010.0%$0$011.0%$0$018.1%$0$020.0%$0$024.0%$
0$030.0%$0$0Crossover RateERROR:#NUM!
Comparison Project A vs Project B
0 0 0 0 0 0 0 0 0 0 0 0 0
0
image1.png

4. Module 3 Assignment:
Capital Budget Decision Making for an Organization
Report prepared by: Replace this text with your name.
Date: Replace this text with the submission date.
Walden University
WMBA 6070:
Managerial Finance
1
Executive Summary
Replace this text with your executive summary.
Part 1: Short-Term Working Capital Considerations

5. Replace this text with introductory information. Add or remove
headings as necessary.
[Heading]
Replace or remove this text. Add or remove headings as
necessary.
[Sub-Heading]
Replace or remove this text. Add or remove headings as
necessary.
Part 2: Long-Term Working Capital Considerations: Time Value
of Money and Bonds
Replace this text with introductory information. Add or remove
headings as necessary.
[Heading]
Replace or remove this text. Add or remove headings as
necessary.
[Sub-Heading]
Replace or remove this text. Add or remove headings as
necessary.
Part 3: Long-Term Working Capital Considerations: CAPM,
Stock Valuation, and Project Evaluation Tools
Replace this text with introductory information. Add or remove
headings as necessary.

6. [Heading]
Replace or remove this text. Add or remove headings as
necessary.
[Sub-Heading]
Replace or remove this text. Add or remove headings as
necessary.
References
[Please delete this note before submitting your Assignment. For
more information about formatting your reference list, please
visit the following site:
https://academicguides.waldenu.edu/writingcenter/apa/reference
s.]
Include appropriately formatted references to support your
Assignment. Refer to the Assignment guidelines for further
information on the requirements.
2
Cash Conversion CycleCash Conversion Cycle(a)Enter figures
belowInventory Conversion Period64daysAverage Collection
Period28daysPayables Deferral Period41daysCash Conversion
Cycle51days(b)Annual Sales$ 2,578,235.00divided into 365
days365daysAverage Sales per Day$ 7,063.6575Average
Collection Period28daysInvestment in Receivables$
197,782.41(c) Step 1: Inventory BalanceAnnual Sales$

7. 2,578,235.00Cost of Goods Sold75%percent of salesdivided into
365 days365daysInventory Conversion Period64days$
5,297.74Inventory$ 339,055.56Step 2: Inventory Turnover
RatioAnnual Sales$ 2,578,235.00Inventory$
339,055.56Turnover Ratio7.60times a year(d)Competitor
A88days54days30days112daysCompetitor
B90days44days30days104days
Additional Funds NeededAdditional Funds NeededLast year's
Sales$ 5,000,000Sales to Increase (in percent)20%Total
Liabilities and Equity = Assets$ 3,000,000Accounts Payable$
300,000Notes Payable$ 600,000Accrued Liability$
300,000Profit Margin3%Retained30%Required increase in
Assets$ 600,000Spontaneous increase in Payables and
Accruals$ 120,000Increase in Retained Earnings$
54,000Assets/Sales60%Next year's Sales (forecasted) $
6,000,000Change in Sales$ 1,000,000Additional Funds
Needed$ 426,000
Cross-Exchange RateCross-Exchange Rate$1 to Israeli
shekels3.58$1 to Japanese Yen109Cross-Exchange
Rate30.45Yen/Shekel
FV & PV Lump SumFuture ValuePresent ValueInterest
RateInterest Rate# of Periods# of PeriodsStarting ValueLump
Sum in the FutureFuture Lump Sum$ - 0Present Value$0
Required Interest RatesRequired Interest RatesPresent Valuein
savingsFuture Valueneeded at retirementAdditional
fundsNumber of PeriodsyearsRequired Interest
RateERROR:#NUM!
FV & PV Annuitya)Future Value of an Annuitya)Present Value
of an AnnuityInterest RateInterest Rate# of Periods# of
PeriodsPayments (per period)Payment per periodFuture Value$
- 0Present Value$0.00b)Future Value of an Annuityb)Present
Value of an AnnuityInterest RateInterest Rate# of Periods# of
PeriodsPayments (per period)Payment per periodFuture Value$
- 0Present Value$0.00c)Future Value of an Annuityc)Present
Value of an AnnuityInterest RateInterest Rate# of Periods# of
PeriodsPayments (per period)Payment per periodFuture Value$

8. - 0Present Value$0.00
Bond ValuationBond ValuationFace ValueYield to
MaturityCoupon Bond CCoupon Bond ZYears to MaturityPrice
of Bond CPrice of Bond
Z4$0.00$0.003$0.00$0.002$0.00$0.001$0.00$0.000$0.00$0.00
YTM & YTCPrice of each of the three bondsBasic Input
DataBond ABond BBond CYears to maturityCoupon ratePar
valuePeriodic payment$0$0$0Yield to
maturity9%9%9%Price$0.00$0.00$0.00Current Yield Bond
ABond BBond CCurrent yield
ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!
CAPM and Required ReturnCAPM and Required ReturnMarket
Beta1.0Required ReturnRisk-Free RateMarket
Premium0.00%Your CompanyRisk-Free Rate0.00%Market
Premium0.00%Company BetaRequired Return0.00%Closet
CompetitorRisk-Free Rate0.00%Market
Premium0.00%Competitor's BetaRequired
Return0.00%Difference in Required Return0.00%
Constant Growth ValueConstant Growth ValuationExpected
DividendConstant GrowthRequired Rate of ReturnCurrent Value
per ShareERROR:#DIV/0!
Non-Constant Growth ValNon-Constant Growth ValuationPaid
DividendNon-Constant Growth x 2 yearsConstant Growth
thereafterRequired Rate of ReturnCash Flow at Horizon or
Continuing DateERROR:#DIV/0!Horizon Timeline
Years0123Dividends$0.0000$0.0000$0.0000$0.0000ERROR:#D
IV/0!Cash FlowERROR:#DIV/0!Present
Value$0.0000ERROR:#DIV/0!$0.0000Intrinsic Stock
ValueERROR:#DIV/0!
WACCWeighted Average Cost of CapitalDebtCommon
EquityCost of DebtTax RateCurrent Stock PriceLast Dividend
PaidExpected Constant GrowthNext Dividend$ - 0Internal
EquityERROR:#DIV/0!WACCERROR:#DIV/0!
Capital BudgetingCapital Budgeting
CriteriaYear01234567Project AProject
BDifference$0$0$0$0$0$0$0$0WACC11%WACC18%NPV @

9. 11%NPV @ 18%Project A$0.00Project A$0.00Project
B$0.00Project B$0.00IRR @ 11%Project
AERROR:#NUM!Project BERROR:#NUM!MIRR @ 11%MIRR
@ 18%Project AERROR:#DIV/0!Project
AERROR:#DIV/0!Project BERROR:#DIV/0!Project
BERROR:#DIV/0!Discount RateNPV-ANPV-
B0.0%$0$010.0%$0$011.0%$0$018.1%$0$020.0%$0$024.0%$
0$030.0%$0$0Crossover RateERROR:#NUM!
Comparison Project A vs Project B
0 0 0 0 0 0 0 0 0 0 0 0 0
0
image1.png
Module 3 Assignment: Part 1
Capital Budget Decision Making for an Organization
Report prepared by:
Date: December 11, 2022
Walden University
WMBA 6070:
Managerial Finance

10. · Gross working capital refer to the total current assets of the
firm. Net working capital of a firm is computed by taking the
current asset less the current liabilities of the firm.
Additionally, Net operating working capital is calculated by
taking the current assets less current non-interest bearing
liabilities of the firm. These three are essential in determining
the amount and timing of the cash collections in the company.
·
· If annual sales is $2, 578, 235 and all on credit, then the
investment in accounts receivables is the same as sales = $2 578
235
·
· In comparing the cash conversion cycle
My company is way better in cash conversion than the
Competitors. My company taker less time during the year to
make cash available.

11. · Strategies that the company can use
1. Reduce the amount of operating expenses in order to expand
the profit margin.
2. Increase the amounts of retention of profits to have more
funds available.
3. Reduce the amounts of liabilities every year.
·
· The options available to the company is to convert the dollar
into Japanese Yen, the convert the yen into the Shekels. It
would be profitable. The strategy I would recommend is to use
future contract on foreign exchange. A good calculation would
result in to profits. Also, another strategy would be use options
derivatives contract.
Assignment: Capital Budget Decision Making for an
Organization—Part 2
Note: In Week 6, you submitted Part 1 of the Module 3
Assignment.
You will complete and submit Part 2 this week. Next
week, you will complete and submit Part 3 and the executive
summary.
As a reminder, you will continue to play the role of a consultant
who has been hired by a mid-sized company that recently went
public to provide some recommendations related to their short-
term and long-term financial needs. Your first project is to
analyze the short- and long-term capital budget needs of the
company. You will prepare and submit a 3- to 5-page report,
including an executive summary in which you synthesize your
recommendations for the following fiscal year, along with the

12. provided Excel spreadsheet with your calculations. Explain your
findings and your recommendations.
For each of the items in your report, you will complete the
calculations in the Module 3 Assignment Part 1 Template and
will then use that financial information to develop your report
to the owner using the Module 3 Assignment Part 2 Template.
In your report, be sure to include relevant citations from the
Learning Resources, the Walden Library, and/or other
appropriate academic sources to support your work.
To prepare for this Assignment:
· Return to the Module 3 Assignment Part 1 Template to
continue completing the calculations.
· Return to your Module 3 Assignment Part 2 Template to
complete Part 2 of your report.
Note: Be sure to keep a copy of your completed
Assignment this week, as you will be adding to the same file for
your Week 8 Assignment.
By Day 7
Submit your synthesis of financial data related to long-term
financing needs for an organization, to include the following:
Part 2: Long-Term Working Capital Considerations: Time Value
of Money and Bonds (1–2 pages, plus calculations in Excel)
·
Future Value: If the company deposits $2 million in a
bank account that pays 6% interest annually, how much will be
in the account after 5 years?
·
Present Value: What is the present value of a security
that will pay $29,000 in 20 years if securities of equal risk pay
5% annually?
·
Required Interest Rates: The company owner has said

13. she will retire in 19 years. She currently has $350,000 saved
and thinks she will need $800,000 at retirement. What annual
interest rate must she earn to reach that goal, assuming she does
not save any additional funds?
·
Future Value of an Annuity: Find the future values of
these ordinary annuities. Compounding occurs once a year.
· $500 per year for 8 years at 14%
· $250 per year for 4 years at 7%
· $700 per year for 4 years at 0%
·
Present Value of an Annuity: Find the present values of
these ordinary annuities. Discounting occurs once a year.
· $600 per year for 12 years at 8%
· $300 per year for 6 years at 4%
· $500 per year for 6 years at 0%
·
Bond Valuation: The company has two bonds in their
investment portfolio, Bond C and Bond Z. Each bond matures in
4 years, has a face value of $1,000, and has a yield to maturity
of 8.2%. Bond C pays an 11.5% annual coupon, while Bond Z is
a zero-coupon bond.
Assuming that the yield to maturity of each bond remains at
8.2% over the next 4 years, calculate the price of the bonds at
each of the following years to maturity. Explain any observed
differences from the pricing calculations of the two bonds.
Years to Maturity
Price of Bond C
Price of Bond Z
4

14. 3
2
1
0
·
Yield to Maturity and Yield to Call: The owner is
interested in investing some retained earnings in corporate
bonds. She is considering the following:
· Bond A has a 7% annual coupon, matures in 12 years, and has
a $1,000 face value.
· Bond B has a 9% annual coupon, matures in 12 years, and has
a $1,000 face value.
· Bond C has an 11% annual coupon, matures in 12 years, and
has a $1,000 face value.
Each bond has a yield to maturity of 9%.
a. Before calculating the prices of the bonds, identify whether
each bond is trading at a premium, at a discount, or at par.
b. Calculate the price of each of the three bonds.
c. Calculate the current yield for each of the three bonds.