Merryl Enterprises Currently Has an Operating Cycle of 62 Days

question 100

Multiple Choice

Merryl Enterprises currently has an operating cycle of 62 days. The firm is analyzing some operational changes, which are expected to increase the accounts receivable period by 2 days and decrease the inventory period by 5 days. The accounts payable turnover rate is expected to increase from 42 to 46 times per year. If all of these changes are adopted, what will the firm's new operating cycle be?

• A)51 days
• B)57 days
• C)59 days
• D)60 days
• E)65 days

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Definitions:

Selective optimization

A strategy of maximizing performance in certain areas while compensating for declines or limitations in others.

Compensation

A process that contributes to successful development. When a loss of some kind prevents the use of one means to an end, the individual finds another means.

Well-being

A general state of health, happiness, and satisfaction with one’s life.

Environmental mastery

The ability to effectively manage and manipulate one's surrounding environment to meet personal needs and goals.