Smiley and Sons has an inventory period of 42 days,an accounts payable period of 33 days,and an accounts receivable period of 38 days.Management is considering offering a 2 percent discount if its credit customers pay for their purchases within 10 days.If the new discount is offered,the accounts receivable period is expected to decline by 19 days.If the new discount is offered,the cash cycle will change from ________ days to ________ days.

Question

Quizplus · Accepted Answer

Original cash cycle = 42 + 38 − 33 = 47 days
New cash cycle = 47 − 19 = 28 days

Smiley and Sons Has an Inventory Period of 42 Days,an