Cash cycle

Maneesh 30 April 2020 at 16:15 PM

A growing company is assessing current working capital requirements. An average of 58 days is required to convert raw materials into finished goods and to sell them. Then an average of 32 days is required to collect on receivables. If the average time the company takes to pay for its raw materials is 15 days after they are received, then the total cash conversion cycle for this company is 
A) 11 days
B)41 days
C) 75 days
D)11 days

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FACULTY 11 May 2020 at 01:04 PM

Option c
Days in inventory 58
Days in acoounts receivables 32
operating cycle 90
Days in acoounts payable                                                                          (less) 15
Cash cycle 75

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