Margetis Inc

question 19

Multiple Choice

Margetis Inc.carries an average inventory of $1,000,000.Its annual sales are $10 million,and its receivables conversion period is twice as long as its inventory conversion period.The firm buys on terms of net 30 days,and it pays on time.Its new CFO wants to decrease the cash conversion cycle by 10 days,based on a 365-day year.He believes he can reduce the average inventory to $863,000 with no effect on sales.By how much must the firm also reduce its accounts receivable to meet its goal of a 10-day reduction in the cash conversion cycle?

• A)$0
• B)$101,900
• C)$136,986
• D)$333,520

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Definitions:

Subsistence

The means by which life is maintained, often referring to the way societies obtain their food.

Climatic Conditions

The overall weather patterns and environmental conditions of a specific region over time.

Microlith

Small blades of flint or similar stone which were hafted together in wooden handles to make tools; widespread in the Mesolithic.

Old World

Refers to the parts of the world known to Europeans before the discovery of the Americas, including Africa, Europe, and Asia.