What Is the Cash Conversion Cycle for a Firm with a Receivables

question 7

Multiple Choice

What is the cash conversion cycle for a firm with a receivables period of 40 days, a payables period of 30 days, and an inventory period of 60 days?

• A) 10 days
• B) 50 days
• C) 70 days
• D)130 days

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Definitions:

Automatic Processing

Cognitive operations that occur without conscious awareness or intention, typically fast and efficient, often as a result of learning or repetition.

Internal Factors

Elements or influences originating within an individual or organization, affecting behavior, decisions, or performance.

Low Grade

A rating or score that indicates an item or performance is below average or expectations.

Difficult Period

A challenging or hard time in one’s life characterized by stress, hardship, or emotional turmoil.