Please see the attached file.
A. Determine the length of the inventory conversion period.
B. Determine the length of the receivables conversion period.
C. Determine the length of the operating cycle.
D. Determine the length of the payables deferral period.
E. Determine the length of the cash conversion cycle.
F. What is the meaning of the number you calculated in question E?
Calculate the effective annual percentage rate of forgoing the cash discounts under each of the following credit terms:
A. 2/10 NET 60
B. 2/10 NET 30
This solution provides calculations for various accounting questions including inventory conversion period, receivables conversion period, operating cycle, payables deferral period, and cash conversion cycle.