Question $9$

$3$ Points

Pascarella Inc. is revising its payables policy. It has annual sales of $$50,735,000,$ an average inventory level of $$15,012,000,$ and average accounts receivable of $$10,008,000.$ The firm's cost of goods sold is $85\%$ of sales. The company makes all purchases on credit and has always paid on the $30$th day. However, it now plans to take full advantage of trade credit and to pay its suppliers on the $40$th day. The CFO also believes that sales can be maintained at the existing level but inventory can be lowered by $$1,946,000$ and accounts receivable by $$1,946,000.$ What will be the net change in the cash conversion cycle, assuming a $365-$day year?

$-26\mathrm{.}6$ days

$-29\mathrm{.}5$ days

$-32\mathrm{.}8$ days

$-36\mathrm{.}4$ days

$-40\mathrm{.}5$ days

Question $6$

Meacham Enterprises' bonds currently sell for $$1,280$ and have a par value of $$1,000.$ They pay a $$135$ annual coupon and have a $15-$year maturity, but they can be called in $5$ years at $$1,050.$ What is their yield to call $($YTC$)?$

$6\mathrm{.}39\%$

$6\mathrm{.}72\%$

$7\mathrm{.}08\%$

$($D$)7\mathrm{.}45\%$

$($E$)7\mathrm{.}82\%$