Mark's Manufacturing's average age of accounts receivable is 45 days, the average age of accounts payable is 40 days, and the average age of inventory is 69 days.Assuming a 365-day year, what is the length of its cash conversion cycle?
A) 63 days
B) 67 days
C) 70 days
D) 74 days
E) 78 days

Question

Quizplus · Accepted Answer

Cash conversion cycle = Average age of inventory + Average age of accounts receivable - Average age of accounts payable 
= 69 + 45 - 40 
= 74 days

Mark's Manufacturing's Average Age of Accounts Receivable Is 45 Days