Pascarella Inc

question 11

Multiple Choice

Pascarella Inc.is revising its payables policy.It has annual sales of $50,735,000, an average inventory level of $15,012,000, and average accounts receivable of $10,008,000.The firm's cost of goods sold is 85% of sales.The company makes all purchases on credit and has always paid on the 30th day.However, it now plans to take full advantage of trade credit and to pay its suppliers on the 40th day.The CFO also believes that sales can be maintained at the existing level but inventory can be lowered by $1,946,000 and accounts receivable by $1,946,000.What will be the net change in the cash conversion cycle, assuming a 365-day year?

• A) −26.6 days
• B) −29.5 days
• C) −32.8 days
• D) −36.4 days
• E) −40.5 days

---

Definitions:

.Docx Files

A file format used by Microsoft Word, introduced in Word 2007, that supports advanced formatting, styles, and content like tables, charts, etc.

Formatting

Formatting entails adjusting the arrangement, appearance, and layout of text and graphics within a document to improve readability and visual appeal.

Speech Recognition Tools

Speech recognition tools are software applications that convert spoken language into text, enabling voice-controlled operation of devices and information processing.

Mobility Issues

Challenges or limitations in moving freely and easily, which can be due to various health conditions or physical impediments.