Data on Mertz Co A) $764
B) $849
C) $943
D) $1,048
E) $1,164

question 69

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.
$\begin{array}{lr}\text { Cost of goods sold }= & \$ 75,000 \\\text { Payables }= & \$ 5,000 \\\text { Payables deferral period (PDP) }= & 24.33 \\\text {Benchmark pavables deferral period }= & 30.00\end{array}$

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

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Definitions:

Shares

Units of ownership interest in a corporation or financial asset, providing a proportion of the profit to shareholders in the form of dividends.

IPOs

Initial Public Offerings, the process by which a private company becomes public by offering its shares for the first time to the public.

Expected Dollar Return

The forecasted amount of money in dollars that an investment is expected to return over a specific period.

Rights Offering

A way for companies to raise capital by giving existing shareholders the right to purchase additional shares at a discount.