Final answer:
The days of account payable outstanding for Revlon, Inc. at the end of Year 2 is approximately 83.9 days. The closest option is a. 84.8. This calculation uses an approximate value for average accounts payable and daily cost of sales.
Step-by-step explanation:
Calculating Days Accounts Payable Outstanding
To calculate the days accounts payable outstanding for Revlon, Inc. at the end of Year 2, one would need to use the following formula:
Days Accounts Payable Outstanding = (Average Accounts Payable / Cost of Sales) × Number of Days in the Period
However, since we only have the ending accounts payable value for Year 2, we will use this value as an approximation for the average. First, we need to find the daily cost of sales, which can be calculated by dividing the annual cost of sales by 365 days.
Daily Cost of Sales = Cost of Sales for Year 2 / 365
Daily Cost of Sales = $668.3 million / 365
Daily Cost of Sales = $1.83 million (approximately)
Next, we use the accounts payable at the end of Year 2:
Accounts Payable End of Year 2 = $153.5 million
Finally, we calculate the Days Accounts Payable Outstanding:
Days Accounts Payable Outstanding = ($153.5 million / $1.83 million) × 365
Days Accounts Payable Outstanding = 83.9 days (approximately)
The answer closest to our approximation is Option a. 84.8.
It should be noted that this calculation assumes a constant rate of cost of sales throughout the year, which may not be the case in reality. Therefore, the calculated days of accounts payable outstanding is an estimate.