BP has a cash conversion cycle of 80 days, an average collection period of 25 days, and an average age of inventory of 70 days. Based on this information, BPs operating cycle is ________ days.
A) 95
B) 85
C) 75
D) 65

Question

Quizplus · Accepted Answer

The operating cycle is the sum of the average age of inventory and the average collection period. Therefore, BP's operating cycle is 70 days (average age of inventory) + 25 days (average collection period) = 95 days.

BP Has a Cash Conversion Cycle of 80 Days, an Average