Shaima Industries has a 120­day operating cycle. If its average age of inventory is 50 days, how long is its average collection period? If its average payment period is 30 days, what is its cash conversion cycle? Place all of this information on a time line similar to Figure

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FIGURE 14.1 100 days me Operating Cycle (Oc) Time Line for MAX Company's Cash Conversion Cycle MAX Company's operating cycle is 100 days, and its cash conversion cycle is 65 days Purchase Raw Materials on Account Sell Finished Goods on Collect Accounts Average Age of Inventory (AAI) Average Collection Period (ACP) 40 days 60 days Cash Inflow AveragePay PaymentPayable Period (APP) Accounts Cash Conversion Cyele (CCC) 65 days 35 days Cash Outflow Time