Question

what is the cash conversion cycle for a firm with a receivable period of 45 days. A payables periods of 50 days and an inventory period of 65 days
1)35 days
2)45 days
3)60 days
4)65 days
​

Answer 1

Answer:

65

Explanation:

it is very easy going person who has worked on YouTube

Answer 2

The cash conversion cycle for a firm  is 60 days and option (3) is correct.

Explanation:

Given:

A firm with a receivable period of 45 days.

A payables periods of 50 days.

An inventory period of 65 days.

To Find:

The cash conversion cycle for a firm.

Formula Used:

The Cash Conversion Cycle (CCC) measures the approximate number of days it takes a company to convert its inventory into cash after a sale to a customer.

The cash conversion cycle = inventory days + receivables days - payables day                         ------- formula no.01.

Solution:

As given, a  firm with a receivable period of 45 days.

Receivable period of  the  firm = 45 days.

As given, a payable periods of 50 days.

Payable  period of  the  firm =  50 days.

As given, an inventory period of 65 days.

An inventory period of  the  firm =  65 days.

Applying formula no.01.

The cash conversion cycle = inventory days + receivables days - payables day

                                            $=65+45-50\\=60\ days.$

Thus,the cash conversion cycle for a firm  is 60 days and option (3) is correct.

#SPJ3