A firm has an average age of inventory of 101 days, an average collection period of 49 days, and an average payment period of 60 days. The firm's cash conversion cycle is ________ days.
A) 60
B) 52
C) 41
D) 90

Question

Quizplus · Accepted Answer

The cash conversion cycle is calculated as the average age of inventory + average collection period - average payment period. Therefore, it's 101 days + 49 days - 60 days = 90 days.

A Firm Has an Average Age of Inventory of 101