Kiley Corporation Had the Following Data for the Most Recent

question 95

Multiple Choice

Kiley Corporation had the following data for the most recent year (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? $\begin{array}{lrr}&\text { Original } & \text { Revised } \\\text { Annual sales: unchanged } & \$ 110,000 & \$ 110,000 \\\text { Cost of goods sold: unchanged } & \$ 80,000 & \$ 80,000 \\\text { Average inventory: lowered by } \$ 4,000 & \$ 20,000 & \$ 16,000 \\\text { Average receivables: lowered by } \$ 2,000 & \$ 16,000 & \$ 14,000 \\\text { Average payables: increased by } \$ 2,000 & \$ 10,000 & \$ 12,000 \\\text { Days in year } & 365 & 365\end{array}$

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

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Definitions:

Evolutionary Fitness

A measure of an organism's ability to survive and reproduce, thus passing its genes to the next generation.

General Mental Ability

Refers to the overall capacity of an individual to understand complex ideas, adapt effectively to the environment, learn from experience, engage in various forms of reasoning, and overcome obstacles through mental effort.

Emotional Intelligence

The ability to understand and manage one's own emotions, and to recognize and influence the emotions of others.

Social Identity Approach

A theoretical framework that explores how individuals perceive themselves and others within social contexts, focusing on the impact of group membership on behavior and attitudes.