Superb Professors

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. −36.4 days
b. −40.5 days
c. −32.8 days
d. −29.5 days
e. −26.6 days
 
Looking for a Similar Assignment? Order now and Get 10% Discount! Use Coupon Code “Newclient”

The post Pascarella Inc. appeared first on Superb Professors.

"Order a Custom Paper on Similar Assignment! No Plagiarism! Enjoy 20% Discount"