BP Has a Cash Conversion Cycle of 80 Days, an Average

question 50

Multiple Choice

BP has a cash conversion cycle of 80 days, an average collection period of 25 days, and an average age of inventory of 50 days. Based on this information, BPs operating cycle is ________ days.

• A) 5
• B) 75
• C) 105
• D) 130

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Definitions:

Gain on Sale

The financial benefit that occurs when the selling price of an asset exceeds its original purchase price.

Loss on Sale

Loss on Sale occurs when the selling price of an asset is less than its carrying amount on the books, resulting in a financial loss.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded against a fixed asset since it was acquired, representing its decrease in value.

Gain on Sale

The profit earned from selling an asset for more than its book value or purchase price.