Desai IncHas the Following Data,in Thousands ?
A) 47 Days
B) 56 Days
C) 52 Days

question 8

Multiple Choice

Desai Inc.has the following data,in thousands.Assuming a 365-day year,what is the firm's cash conversion cycle? Do not round intermediate calculations.Round to the nearest whole day. $\begin{array}{lr}\text { Annual sales = } & \$ 45,000 \\\text { Annual cost of goods sold = } & \$ 22,500 \\\text { Inventory }= & \$ 4,500 \\\text { Accounts receivable }= & \$ 1,800 \\\text { Accounts payable = } & \$ 2,500\end{array}$
?

• A) 47 days
• B) 56 days
• C) 52 days
• D) 54 days
• E) 58 days

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Definitions:

Operating Activities

Transactions and events related to the principal revenue-producing activities of an entity, reflected in its cash inflows and outflows.

Indirect Method

A way of reporting cash flows from operating activities in the cash flow statement by starting with net income and adjusting for changes in non-cash items and operating capital.

Quality of Earnings

An assessment of the degree to which a company's earnings are derived from sustainable, core business activities.

Productive Assets

Assets that are utilized in the production process to generate revenue, including machinery, buildings, and equipment.