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Cash Conversion Cycle

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What is the cash conversion cycle for a firm with $3million average inventories. $1.5 million average accounts payable, a receivables period of 40 days, and an annual cost of goods sold of $18million

a. 14.59 days
b. 46.25 days
c. 70.41 days
d. 136.25 days

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Solution Summary

How to calculate the cash conversion cycle.

Solution Preview

COGS = 18,000,000
Avg COGS = COGS/365 = 49,315.0685
Inv = 3,000,000
DIO (Days Inventory ...

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