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.
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.