You Have Recently Been Hired to Improve the Performance of Multiplex

question 141

Multiple Choice

You have recently been hired to improve the performance of Multiplex Corporation, which has been experiencing a severe cash shortage. As one part of your analysis, you want to determine the firm's cash conversion cycle. Using the following information and a 365-day year, what is your estimate of the firm's current cash conversion cycle? • Current inventory = $120,000.
• Annual sales = $600,000.
• Accounts receivable = $157,808.
• Accounts payable = $25,000.
• Total annual purchases = $365,000.
• Purchases credit terms: net 30 days.
• Receivables credit terms: net 50 days.

• A) 49 days
• B) 193 days
• C) 100 days
• D) 168 days
• E) 144 days

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Definitions:

Sea Level

The average level of the surface of the ocean at any given place, used as a standard in calculating land elevation and water depth.

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The pressure exerted by a fluid in a hydraulic system, used to generate force and motion in hydraulic machinery and tools.

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Mechanisms in vehicles that allow the driver to guide and direct the direction of the vehicle.

Automatic Transmissions

A type of vehicle transmission that automatically changes gear ratios as the vehicle moves, without the driver having to manually select gears.