Bradco Supply currently has an operating cycle of 62 days. The company is analyzing some operational changes, which are expected to decrease the accounts receivable period by 2 days and increase the inventory period by 5 days. The accounts payable turnover rate is expected to increase from 24 to 28 times per year. If all of these changes are adopted, what will the company's new operating cycle be?
Bradco Supply currently has an operating cycle of 62 days. The company is analyzing some operational changes, which are expected to decrease the accounts receivable period by 2 days and increase the inventory period by 5 days. The accounts payable turnover rate is expected to increase from 24 to 28 times per year. If all of these changes are adopted, what will the company's new operating cycle be?
Related questions
| A firm is considering several policy changes to increase sales. It will increase the variety of goods it keeps in inventory, but this will increase inventory by $29,000. It will offer more liberal sales terms, but this will result in average receivables increasing by $84,000. These actions are expected to increase sales by $990,000 per year, and cost of goods will remain at 70% of sales. Because of the firmâs increased purchases for its own production needs, average payables will increase by $54,000. What effect will these changes have on the firmâs cash conversion cycle? (Use 365 days in a year. Do not round intermediate calculations. Round your answer to 2 decimal places.) |
| The cash conversion cycle will (Click to select)decreaseincrease by days. |
