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:

Debtor's Income

The amount of money received by an individual or entity who owes a debt to another party.

Bankruptcy Trustee

A person appointed by the court to manage the debtor’s funds in a bankruptcy proceeding.

Debtor's Estate

The total sum of a debtor's legal rights, obligations, and owned property that might be used to repay debts.

Chapter 7 Proceeding

A Chapter 7 Proceeding refers to a bankruptcy process outlined in the United States Bankruptcy Code where a debtor's assets are liquidated to repay creditors.