16 . Selling goods and services on credit is : 17 . The three components of credit policy are :
18 . Given a fixed level of sales and a constant profit margin , an increase in the accounts payable period can result from :
19 . On September 1 , a firm grants credit with terms of 2 / 10 net 30 . The creditor :
20 . The credit period begins on the : 21 . When credit is granted to another firm this gives rise to a ( n ):
22 . Since the credit decision usually includes riskier customers , the decision should adjust for this by :
23 . Jordan and Sons has an inventory period of 48.6 days , an accounts payable period of 36.2 days , and an accounts receivable period of 29.3 days . Management is considering offering a 5 percent discount if its credit customers pay for their purchases within 10 days . This discount is expected to reduce the receivables period by 17 days . If the discount is offered , the operating cycle will decrease from ___ days to ___ days .
24 . Brown ’ s Market currently has an operating cycle of 76.8 days . It is planning some operational changes that are expected to decrease the accounts receivable period by 2.8 days and decrease the inventory period by 3.1 days . The accounts payable turnover rate is expected to increase from 9 to 11.5 times per year . If all of these changes are adopted , what will be the firm ' s new operating cycle ?
25 . On average , D & M sells its inventory in 37 days , collects on its receivables in 3.4 days , and takes 35 days to pay for its purchases . What is the length of the firm ’ s operating cycle ?
26 . A firm has an inventory turnover rate of 15.7 , a receivables turnover rate of 20.2 , and a payables turnover rate of 14.6 . How long is the cash cycle ?