Question

Suppose the cash cycle is 85 days, the accounts payable period is 10 days, and the accounts receivable period is 50 days. How
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Answer #1

The correct answer is mentioned below :

The correct answer is option " 45 Days "

Please see the below mentioned formula :

Cash conversion cycle = Days inventory oustanding + Days sales outstanding - Days payables outstanding

85 days = Days inventory oustanding + 50 days - 10 Days

Days inventory oustanding = 85 days - 40 days

Days inventory oustanding = 45 days

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