Margetis Inc

question 15

Multiple Choice

Margetis Inc.carries an average inventory of $750,000.Its annual sales are $10 million,its cost of goods sold are 75% of annual sales,and its receivables collection period is twice as long as its inventory conversion period.The firm buys on terms of net 30 days,and it pays on time.Its new CFO wants to decrease the cash conversion cycle by 18 days,based on a 365-day year.He believes he can reduce the average inventory to $605,885 with no effect on sales.By how much must the firm also reduce its accounts receivable to meet its goal in the reduction of its cash conversion cycle?

• A) $300,997
• B) $234,778
• C) $249,828
• D) $325,077
• E) $310,027

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Definitions:

Self-Esteem

A person's inward valuation of their significance or value.

Reciprocation

The act of responding to another's action or gesture with a similar action, often related to the principle of "give and take" in social interactions.

Matching Hypothesis

The theory that individuals are more likely to form long-standing relationships with someone who is equally attractive as they are.

Female-Male Friendships

Platonic relationships between women and men, characterized by mutual affection without romantic involvement.