You have recently been hired to improve the performance of Multiplex Corporation which has been experiencing a severe cash shortage.As one part of your analysis,you want to determine the firm's cash conversion cycle.Using the following information and a 360-day year,what is your estimate of the firm's current cash conversion cycle?
Current inventory= $120,000
Annual sales= $600,000
Accounts receivable= $160,000
Accounts payable= $25,000
Total annual purchases= $360,000
Purchases credit terms:net 30 days
Receivables credit terms:net 50 days
A) 49 days
B) 143 days
C) 100 days
D) 168 days
E) 191 days

Question

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The Answer of You have recently been hired to improve the performance of Multiplex Corporation which has been experiencing a severe cash shortage.As one part of your analysis,you want to determine the firm's cash conversion cycle.Using the following information and a 360-day year,what is your estimate of the firm's current cash conversion cycle?
Current inventory= $120,000
Annual sales= $600,000
Accounts receivable= $160,000
Accounts payable= $25,000
Total annual purchases= $360,000
Purchases credit terms:net 30 days
Receivables credit terms:net 50 days
A) 49 days
B) 143 days
C) 100 days
D) 168 days
E) 191 days

You Have Recently Been Hired to Improve the Performance of Multiplex