Wislon Has an Inventory Turnover Rate of 15, a Trade

question 89

Multiple Choice

Wislon has an inventory turnover rate of 15, a trade payables period of 54 days and a trade receivables period of 37 days.What is the length of the cash cycle?

• A)-7.33 days.
• B)-2.00 days.
• C)2.00 days.
• D)6.50 days.
• E)7.33 days.

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Definitions:

360-Day Year

A simplified method of calculating interest using a 360-day year instead of 365 days, commonly used in banking.

Exact Simple Interest

Refers to interest calculated precisely on the principal amount of a loan or investment, without compounding, over a specific time period.

365-Day Year

A method of interest calculation that uses a full calendar year to determine the amount due.

Loan Period

The duration of time from the initiation to the full repayment of a loan.