Merryl Enterprises Currently Has an Operating Cycle of 59 Days

question 48

Multiple Choice

Merryl Enterprises currently has an operating cycle of 59 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)54 days
• C)56 days
• D)59 days
• E)65 days

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Definitions:

Unilateral Contract

An agreement in which one party makes a promise in exchange for an act performed by another party.

Consideration

In contract law, a crucial element that refers to something of value promised to another when making a contract.

Liquidated Debt

Debt for which there is no dispute between the parties about the fact that money is owed and the amount of money owed.

Enforceable Accord

An agreement that is legally binding and can be upheld in court.