The Shoe Tree Currently Has an Operating Cycle of 199

question 108

Multiple Choice

The Shoe Tree currently has an operating cycle of 199 days and a cash cycle of 54 days.The company is implementing some changes that will reduce the inventory period by 11 days, decrease the receivables period by 6 days, and decrease the accounts payable period by 4 days.How many days will be in the new cash cycle once all of these changes become effective?

• A)35 days
• B)45 days
• C)41 days
• D)33 days
• E)38 days

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Definitions:

Money

A medium of exchange that is authorized or adopted by a government as part of its currency.

Futures Contract

A binding contract that stipulates the buying or selling of a certain financial instrument or commodity at a price fixed in advance, with the transaction to be executed at a predetermined future time.

Forward Contract

A personalized deal between two parties to exchange an asset at a set price on an agreed future date.

Settlement Date

The date on which a trade or transaction must be finalized, with the buyer delivering payment and the seller delivering the asset.