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Aloiza [94]
3 years ago
8

The Fried Green Tomatoes Restaurant has increased its operating cycle from 97.4 days to 101.7 days while the cash cycle has decr

eased by 2.9 days. How have these changes affected the accounts payable period?
a. Decreased by 11 days
b. Decreased by 5 days
c. Decreased by 1 day
d. Increased by 5 day
e. Increased by 11 days
Business
1 answer:
erastova [34]3 years ago
7 0

Answer:

Increased by 7.2 days

Explanation:

As in the question it is mentioned that the operating cycle is increased from 97.4 days to 101.7 days so the difference in days is

= 101.7 days - 97.4 days

= 4.3 days

And, the cash cycle is decreased by 2.9 days

So, the total number of days would be

= 4.3 days + 2.9 days

= 7.2 days

These have been the negative impacts

The options that are mentioned in wrong and the above is the righ answer

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<u>Year  </u>                  <u>Cash flow</u>

0                           -$9,500  

1                             $2,000

2                            $2,025

3                            $2,050

4                            $2,075

5                            $2,100

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Two mutually exclusive alternatives are being considered. Both have lives of 10 years. Alternative A has a first cost of $10,000
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Answer:

Alternative B should be selected since its NPV is higher

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year         cash flow alternative A     cash flow alternative B

0                      -10000                    -25000

1                    4500                    8800

2                    4500                    8800

3                    4500                    8800

4                    4500                    8800

5                    4500                    8800

6                    4500                    8800

7                    4500                    8800

8                    4500                    8800

9                    4500                    8800

10                    4500                    8800

 

 

discount rate             6%                    6%

 

NPV                23120                       39769

4 0
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