Data on Mertz Co

question 131

Multiple Choice

Data on Mertz Co.for the most recent year are shown below,along with the payables deferral period (PDP) for the firms against which it benchmarks.The firm's new CFO believes that the company could delay payments enough to increase its PDP to the benchmarks' average.If this were done,by how much would payables increase? Use a 365-day year.
Cost of goods sold =
$75,000
Payables =
$5,000
Payables deferral period (PDP) =
24) 33
Benchmark payables deferral period =
30) 00

• A) $764
• B) $849
• C) $943
• D) $1,048
• E) $1,164

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Definitions:

Significance Level

A threshold within which the p-value of a hypothesis test must fall for the result to be deemed statistically significant, typically set at 0.05 or 5%.

Test Power

The likelihood that a statistical test will correctly reject a false null hypothesis, identifying an effect when it is present.

Level of Significance

The threshold used in statistical hypothesis testing to decide whether to reject the null hypothesis, typically denoted by alpha (α) and set prior to conducting a test.

Measure of Performance

A metric used to evaluate the effectiveness, efficiency, or quality of a procedure, process, or activity.