The Time Interval Between Paying for Raw Materials and Collecting

question 88

Multiple Choice

The time interval between paying for raw materials and collecting on sales of finished goods is known as the:

• A)Inventory cycle
• B)Matching cycle
• C)Cash conversion cycle
• D)Accounts receivable cycle

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Definitions:

NPV

Net Present Value - a calculation used to assess the profitability of a project or investment by summing the present values of all cash flows associated with it.

IRR

Internal rate of return. A capital budgeting technique that rates projects according to their expected return on invested funds. The higher the return the better.

MIRR

Modified Internal Rate of Return (MIRR) is a financial metric that evaluates the profitability of investments, adjusting the internal rate of return (IRR) to account for the reinvestment of cash flows at a different rate.

Present Value

The current value of a future amount of money or stream of cash flows, discounted at a certain interest rate.