Kar's Currently Has a 208-Day Operating Cycle

question 15

Multiple Choice

Kar's currently has a 208-day operating cycle.The company is concentrating on increasing its inventory turnover rate from 7.9 to 8.2 times.What will the firm's new operating cycle be if it can effectively make this change?

• A)206.31 days
• B)209.69 days
• C)207.14 days
• D)208.86 days
• E)207.64 days

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Definitions:

Annual

Pertaining to or occurring once every year.

Selling Price

The amount of money for which an item or service is sold in the market.

Operating Cash Flow

Represents the amount of cash generated by a company's normal business operations.

Interest Expense

The cost incurred by an entity for borrowed funds.