The Cash Conversion Cycle Is Equal To

question 104

Multiple Choice

The cash conversion cycle is equal to:

• A) the cash flow cycle.
• B) inventory holding period less the average collection period less the accounts payable period.
• C) inventory holding period less the average collection period plus the accounts payable period.
• D) inventory holding period plus the average collection period less the accounts payable period.

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Definitions:

Dominant Firm

Firm with a large share of total sales that sets price to maximize profits, taking into account the supply response of smaller firms.

Demand Curve

Illustrates the relationship between the price of a good or service and the quantity demanded by consumers, typically showing a downward slope.

Fringe Firms

Small companies that operate at the edges of a market, often providing alternative or innovative products compared to mainstream companies.

Profit Maximizing

The process or strategy of adjusting production and sales to achieve the highest possible profit.