A firm has a cash conversion cycle of 80 days, an average collection period of 25 days, and an average age of inventory of 70 days. Its operating cycle is ________ days.
A) 95
B) 105
C) 60
D) 130

Question

Quizplus · Accepted Answer

The operating cycle is the sum of the average collection period and the average age of inventory. In this case, the operating cycle is 25 days + 70 days = 95 days.

A Firm Has a Cash Conversion Cycle of 80 Days