Which of the Following Describes the Cash Conversion Cycle

question 84

Multiple Choice

Which of the following describes the cash conversion cycle?

• A)From the purchase of inventory to the collection of cash from the sale of that inventory.
• B)From the payment for inventory to the sale of that inventory.
• C)From the payment for inventory to the collection of cash from the sale of that inventory.
• D)From the purchase of inventory to the sale of that inventory.
• E)None of the above describes the cash conversion cycle.

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Definitions:

Annuity

A fiscal vehicle offering a steady payout to individuals, commonly employed in retirement strategy.

Payments

The act of transferring money from one party to another, often in exchange for goods, services, or to fulfill a legal obligation.

Compounded Quarterly

Interest added to the principal sum every quarter, or four times a year, resulting in the interest of the next period being calculated on the new total.

Car Loan

A sum of money borrowed to purchase a car, which is expected to be paid back with interest over a set period of time.