Your Firm Currently Has an Operating Cycle of 92 Days

question 156

Multiple Choice

Your firm currently has an operating cycle of 92 days. You are analyzing some operational changes which are expected to decrease the accounts receivable period by 4 days and decrease the inventory period by 5 days. The accounts payable turnover rate is expected to increase from 8 to 9 times per year. If all of these changes are adopted, what will be your firm's new operating cycle?

• A) 77.93 days
• B) 80.27 days
• C) 81.93 days
• D) 83.00 days
• E) 84.08 days

---

Definitions:

Future Cost

Predicted financial expenditure associated with an action or decision, considering potential increases in prices or changes in resource availability.

Labour

The human effort, whether physical or mental, that is applied to the production of goods and services.

Goal-Sharing Plans

A type of incentive plan where employees are rewarded if collective goals are achieved, promoting teamwork and collaboration.

Employee Participation

A workplace practice where employees are involved in decision-making processes, potentially improving satisfaction and productivity.