A firm with an inventory period of 30 days, an accounts receivable period of 30 days, and an accounts payable period of 90 days has a cash conversion cycle of _____ days.
A) 150
B) -60
C) 30
D) -30

Question

Quizplus · Accepted Answer

The cash conversion cycle is calculated as the inventory period plus the accounts receivable period minus the accounts payable period. Therefore, it's 30 days (inventory) + 30 days (receivables) - 90 days (payables) = -30 days.

A Firm with an Inventory Period of 30 Days, an Accounts