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:

Brand Extension

A marketing strategy where a company uses an existing brand name to introduce a new product or category to the market, leveraging the existing brand's equity.

Retailer

A business or person that sells goods directly to consumers, typically operating from a physical or online store.

National Brand

Products or services that are marketed under a manufacturer's branding and distributed across an entire country, distinct from private labels or local brands.

Private-label Brand

Products manufactured by one company for sale under another company's brand, typically offered as lower-cost alternatives to national brands in retail stores.