Bruceton Farm Markets Currently Has an Operating Cycle of 76

question 10

Multiple Choice

Bruceton Farm Markets currently has an operating cycle of 76 days.The firm is analyzing some operational changes that are expected to decrease the accounts receivable period by 3 days and decrease the inventory period by 8 days.The accounts payable turnover rate is expected to increase from 7 to 9 times per year.If all of these changes are adopted,what will the firm's new operating cycle be?

• A)87 days
• B)58 days
• C)54 days
• D)65 days
• E)76 days

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Definitions:

Current Assets

Assets that are expected to be converted into cash, sold, or used up within one year or within the normal operating cycle of the business, whichever is longer.

Current Liabilities

A company's debts or obligations that are due within one year.

Quick Ratio

A measure of a company's ability to meet its short-term liabilities with its most liquid assets, providing insights into financial health.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or within the normal operating cycle of a business, whichever is longer.