What is the cash cycle for a firm with $3 million average inventories,$1.5 million average accounts payable,a receivables period of 40 days,and annual sales of $20 million and an annual cost of goods sold of $18 million?
A) 14.59 days.
B) 46.25 days.
C) 136.25 days.
D) 70.42 days.

Question

Quizplus · Accepted Answer

Cash conversion cycle = $3m / ($18m / 365) + 40 − $1.5m / ($18m / 365) = 70.42 days

What Is the Cash Cycle for a Firm with $3