1) Easy Rentals Co. purchases are equal to 79 percent of the following month's sales. The accounts payable period for purchases is 30 days while all other expenditures are paid in the month in which they are incurred. Assume each month has 30 days. The company has compiled the following information.

Account May June July

Sales $10,500 $11,000 $12,000

Other Expenses $ 1,625 $1,750 $1,750

Interest and Taxes $ 625 $ 750 $ 875

Question: What is the total amount of the firm's disbursements for the month of June?

a) $10,500

b) $10,795

c) $13,500

d) $ 8,795

e) $11,190

2) An increase in the inventory turnover rate must increase the cash cycle.

a) True

b) False

3) Brown's Ferry Furniture Outlet has an accounts receivable period of 45 days and an accounts payable period of 96 days. The company turns over its inventory 2.8 times per year. What is the length of the firm's operating cycle?

a) 175.36 days

b) 189.22 days

c) 85.36 days

d) 205.68 days

e) 201.33 days