Determine the Cash Conversion Cycle Based on the Following Information

question 22

Multiple Choice

Determine the cash conversion cycle based on the following information: inventory-to-sale conversion period = 112.9 days; sale-to-cash conversion period = 57.1 days; and purchase-to-payment conversion period = 76.8 days.

• A) 93.2 days
• B) 132.6 days
• C) 170.0 days
• D) 246.8 days
• E) 365.0 days

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Definitions:

Competitive Price

A pricing strategy where the price is set based on what competitors are charging for similar products or services.

Market Price

The current price at which a good or service can be bought or sold in a marketplace.

Unionized Plumbers

Plumbers who are members of a labor union, which negotiates wage rates and working conditions on their behalf.

Wage Rate

The amount of compensation paid to an employee by an employer in exchange for work performed, typically expressed per hour or year.