What Is the Cash Conversion Cycle for a Firm with $3

question 109

Multiple Choice

What is the cash conversion cycle for a firm with $3 million average inventories, $1.5 million average accounts payable, a receivables period of 45 days, and an annual cost of goods sold of $18 million?

• A)14.59 days
• B)46.25 days
• C)75.41 days
• D)136.25 days Cash conversion cycle = inventory period + receivables period - accounts payable period
• =

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Definitions:

Unemployment Taxes

Taxes employers pay to fund unemployment benefits, typically calculated based on the amount of wages paid to employees.

Lien

A legal right or claim against a property as security for the payment of a debt or obligation.

National Labor Relations Act

A foundational statute in United States labor law that protects the rights of employees to organize and to bargain collectively with their employers.

Private-Sector Employees

Individuals who work for businesses or organizations that are not part of the government.