Finance

Running head: FINANCE
Finance
Name of the student
Name of the university
Student ID
Author note

1FINANCE
Table of Contents
Part 1 – Company perspective.........................................................................................................2
Answer (a)...................................................................................................................................2
Question (b).................................................................................................................................3
Question c....................................................................................................................................3
Answer (i)................................................................................................................................3
Answer (ii)...............................................................................................................................4
Answer (iii)..............................................................................................................................4
Part 2 – Capital budgeting...............................................................................................................5
Answer (a)...................................................................................................................................5
Answer (b)...................................................................................................................................5
Answer (c)...................................................................................................................................6
Answer (d)...................................................................................................................................7
Answer (e)...................................................................................................................................7
Reference.........................................................................................................................................8

2FINANCE
Part 1 – Company perspective
Answer (a)
Cash conversion cycle is used to express the time in days taken by the entity for
converting the investment made by the entity in the investment and other resources into the cash.
It considers the time required by the entity for selling its inventory, times required by it to collect
its receivables and time taken for making payment to the creditors on time. Looking into the cash
conversion cycle of Apple Inc it can be observed that Apple’s cash conversion cycle has been
increased in the negative terms whereas the same for Samsung has been increased in positive
terms (Yazdanfar and Öhman 2014). Major reason of this significant difference in both
company’s cash conversion cycle is that Apple makes it sales on direct basis where it gets
payment though cash or through card on immediate basis. On the contrary, Samsung makes its
sales indirectly though various vendors that generally requires long credit period for the payment
(Talonpoika et al. 2014). Further, if the negotiation term is taken into consideration it can be