A Firm Purchases Raw Materials on June 1st

question 50

Multiple Choice

A firm purchases raw materials on June 1st.It converts the raw materials into inventory by the last day of the month,June 30th.However,it pays for the materials on June 15th.On July 31st,it sells the finished goods inventory.Then the firm collects cash from the sale one month later on August 31st.If this sequence accurately represents the firm's average working capital cycle,what is the firm's cash conversion cycle in days?

• A) 45 days
• B) 77 days
• C) 61 days
• D) 107 days
• E) 30 days