A Firm Has an Average Age of Inventory of 101

question 96

Multiple Choice

A firm has an average age of inventory of 101 days, an average collection period of 49 days, and anaverage payment period of 60 days. The firm's cash conversion cycle is

• A) 112 days.
• B) 8 days
• C) 90 days.
• D) 150 days.

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Definitions:

Loss

A situation where business expenses exceed revenues, resulting in a negative net income.

Disposal of Asset

The process of selling, scrapping, or otherwise disposing of a company's asset.

Copyright

A legal right granted to the creator of an original work, protecting it from unauthorized use.

Intangible Assets

Non-physical assets with economic value, such as patents, trademarks, copyrights, and goodwill, that are expected to provide benefits to a business over multiple periods.