Rossiter's Currently Has a Cash Cycle of 43

question 52

Multiple Choice

Rossiter's currently has a cash cycle of 43.4 days. Assume the operations are changed such that the receivables period decreases by 2.6 days, the inventory period by increases by 1.3 days, and the payables period increases by 3.4 days. What will be the length of the cash cycle after these changes?

• A) 39.2 days
• B) 45.5 days
• C) 38.7 days
• D) 41.3 days
• E) 48.1 days

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Definitions:

Days

Time period measured in units of 24 hours.

Investment

asset or item acquired with the goal of generating income or appreciation.

Interest

The cost of borrowing money, typically expressed as an annual percentage of the loan amount, or the income earned on deposited funds.

Simple Interest Rate

An interest rate calculation method that is based solely on the original principal amount and does not factor in compounded interest.