Merryl Enterprises currently has an operating cycle of 59 days. The firm is analyzing some operational changes, which are expected to increase

Merryl Enterprises currently has an operating cycle of 59 days. The firm is analyzing some operational changes, which are expected to increase the accounts receivable period by 2 days and decrease the inventory period by 5 days. The accounts payable turnover rate is expected to increase from 42 to 46 times per year. If all of these changes are adopted, what will the firm's new operating cycle be?    A.  51 days B.  54 days C.  56 days D.  59 days E.  65 days Operating cycle = 59 + 2 - 5 = 56 days

68.

On average, Furniture & More is able to sell its inventory in 27 days. The firm takes 87 days on average to pay for its purchases. On the other hand, its average customer pays with a credit card which allows the firm to collect its receivables in 4 days. Given this information, what is the length of operating cycle?    A.  31 days B.  38 days C.  45 days D.  56 days E.  62 days Operating cycle = 27 + 4 = 31 days

69.

Interior Designs has an inventory period of 51 days, an accounts payable period of 38 days, and an accounts receivable period of 32 days. Management is considering an offer from their suppliers to pay within 10 days and receive a 2 percent discount. If the new discount is taken, the accounts payable period is expected to decline by 26 days. If the new discount is taken, the operating cycle will be _____ days.    A.  52 B.  62 C.  78 D.  83 E.  91 Original operating cycle = 51 + 32 = 83 days; The operating cycle will not change as the accounts payable period does not affect the operating cycle, only the cash cycle.