For the Cook County Company,the Average Age of Accounts Receivable

question 122

Multiple Choice

For the Cook County Company,the average age of accounts receivable is 60 days,the average age of accounts payable is 45 days,and the average age of inventory is 72 days.Assuming a 360-day year,what is the length of the firm's cash conversion cycle?

• A) 87 days
• B) 90 days
• C) 65 days
• D) 48 days
• E) 66 days

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Definitions:

Financing Activities

Transactions and events that involve raising funds for the company and repaying funds to investors, such as issuing stock or borrowing.

Cash Dividend

A payment made by a company out of its profits to shareholders in the form of cash.

Financing Activities

Activities that result in changes in the size and composition of the equity and/or borrowings of a company.

Cash Dividend

A payment made by a corporation to its shareholders, usually as a distribution of profits.