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Cash Conversion Cycle- Xtreme Toys

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Calculate the following:
i. Inventory conversion period
ii. Payables deferral period
iii. Receivables conversion period
iv. Operating cycle
v. Cash conversion cycle (cash gap)
vi. If the company's cost of funds is 8%, what is the annual cost of financing the cash gap.

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Solution Summary

The solution calculates Inventory conversion period, Payables deferral period, Receivables conversion period, Operating cycle, Cash conversion cycle, cash gap and annual cost of financing the cash gap.

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