Tryst Energy Inc

question 258

Multiple Choice

Tryst Energy Inc. has an average age of inventory of 65 days, an average collection period of 60 days and an average payment period of 65 days. The firm's total annual outlays for operating cycle investments are $3.65 million. Assuming a 365-day year, how much financing is required to support its cash conversion cycle?

• A) $600,000
• B) $650,000
• C) $700,000
• D) $559,000

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Definitions:

Comprehensive Income

Comprehensive income includes all changes in equity during a period except those resulting from investments by owners and distributions to owners. It encompasses net income and other comprehensive income items.

Interest Revenue

Income earned on investments, such as loans and securities, over a period.

Operating Income

Revenue from business operations after deducting operating expenses, but before interest and taxes.

Cost Method

An accounting method used to value certain investments at their original purchase cost, without adjusting for market fluctuations.