BP Has a Cash Conversion Cycle of 80 Days, an Average

question 109

Multiple Choice

BP has a cash conversion cycle of 80 days, an average collection period of 25 days, and an average age of inventory of 70 days.Based on this information, BPs operating cycle is ________ days.

• A)95
• B)85
• C)75
• D)65
• E)none of the above

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Definitions:

Currency Swap

A financial agreement between two parties to exchange principal and/or interest payments of a loan in one currency for equivalent amounts in another currency.

Fixed Interval

A specified period of time between events or actions, used in scheduling and monitoring activities.

Uncovered Interest Parity

An economic theory suggesting that the difference in interest rates between two countries will equal the expected change in exchange rates between their currencies.

Eurobonds

International bonds issued in a currency different from the currency of the country or market in which they are issued, allowing issuers to access capital outside their home markets.