Zervos Inc

question 32

Multiple Choice

Zervos Inc. had the following data for 2008 (in millions) . The new CFO believes (1) that an improved inventory management system could lower the average inventory by $4,000, (2) that improvements in the credit department could reduce receivables by $2,000, and (3) that the purchasing department could negotiate better credit terms and thereby increase accounts payable by $2,000. Furthermore, she thinks that these changes would not affect either sales or the costs of goods sold. If these changes were made, by how many days would the cash conversion cycle be lowered?

• A) 34.0
• B) 37.4
• C) 41.2
• D) 45.3
• E) 49.8

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Definitions:

Buyer

An individual or organization that purchases goods or services.

Use

The application or operation of something for its intended purpose or function.

Black Box

In technology and psychology, a system or process whose internal workings are not visible or understood but can be observed by its inputs and outputs.

Internalize

The process of integrating beliefs, values, standards, or behaviors within oneself without external influence.