A firm's inventory and accounts payable periods are 80 and 42 days, respectively. How long must the firm's receivables period be in order to limit the cash conversion cycle to 65 days?

Name: A firm's inventory and accounts payable periods are 80 and 42 days, respectively. How long must the firm's receivables period be in order to limit the cash conversion cycle to 65 days?
Brand: Quizplus
Rating: 4.7 (38 reviews)

Question

Quizplus · Accepted Answer

Cash conversion cycle = 65 = A/R period + 80 - 42; A/R period = 27 days

A Firm's Inventory and Accounts Payable Periods Are 80 and 42