Approximately How Long Will It Take Arnold's Savings to Grow

question 63

Multiple Choice

Approximately how long will it take Arnold's savings to grow into $2,000?

• A)60 months
• B)5 years
• C)8.5 years
• D)6 years

---

Definitions:

Cash Conversion Cycle

A metric that expresses the duration (in days) it takes for a company to convert its investments in inventory and other resources into cash flows from sales.

DSO

Days Sales Outstanding, a measure of the average number of days that a company takes to collect revenue after a sale has been made.

Average Inventory

It is the mean value of inventory within a specific period, calculated to help understand inventory levels and manage them effectively.

Cash Budget

A cash budget is a financial plan that estimates cash inflows and outflows over a specified period, often used by businesses to manage liquidity.