Jordan Air Inc

question 124

Multiple Choice

Jordan Air Inc.has average inventory of $1,000,000.Its estimated annual sales are 15 million and the firm estimates its receivables collection period to be twice as long as its inventory conversion period.The firm pays its trade credit on time;its terms are net 30.The firm wants to decrease its cash conversion cycle by 10 days.It believes that it can reduce its average inventory to $900,000.Assume a 360-day year and that sales will not change.Cost of goods sold equal 80 percent of sales.By how much must the firm also reduce its accounts receivable to meet its goal of a 10 day reduction?

• A) $101,900
• B) $1,000,000
• C) $291,667
• D) $333,520
• E) $0

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Definitions:

Performance Measurement

The process of evaluating the efficiency, effectiveness, and productivity of an individual or organization, often using quantitative indicators.

Mixed-Standard Scale

A measurement tool that combines elements of criterion-referenced and norm-referenced tests to assess performance.

Behavioral Observation Scale

A tool used in performance management to rate and assess an employee's behavior based on specific observable actions within the workplace.

Performance Measurement

The systematic process of tracking outcomes and results obtained from the activities and operations of programs or employees, often used to gauge progress towards objectives.