A Firm Has a Cash Conversion Cycle of 80 Days

question 205

Multiple Choice

A firm has a cash conversion cycle of 80 days, an average collection period of 25 days, and an average age of inventory of 70 days. Its operating cycle is ________ days.

• A) 95
• B) 105
• C) 60
• D) 130

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Definitions:

Sub-Prime Borrowers

Individuals who have poor credit histories and are considered high risk for defaulting on loan payments, often facing higher interest rates.

Housing Boom

A period characterized by rapid increases in the value of residential properties, often leading to increased building and investment in housing.

Default Rates

The percentage of borrowers who fail to repay their loans according to the terms of their agreements.

Foreclosure Rates

The percentage of properties undergoing the process of legal repossession by lenders due to borrowers' failure to make mortgage payments.