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A Firm Has an Average Age of Inventory of 60

question 8

Multiple Choice

A firm has an average age of inventory of 60 days, an average collection period of 45 days, and an average payment period of 30 days. The firm's cash conversion cycle is ________ days.


Definitions:

Present Value

The immediate value assigned to a future sum of money or cash movements, based on a particular return rate.

Interest Period

The duration over which interest is calculated on a loan or investment, which could be monthly, quarterly, semiannually, or annually.

Bond Indenture

A legal document specifying the terms, conditions, and details of a bond issued by a corporation or government entity.

Corporation Issuing

The process by which a corporation releases or sells securities, like stocks or bonds, to raise capital.

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