(Calculating the cash conversion cycle) (Related to Checkpoint 18.1 on page 617) A business can receive 20...
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(Calculating the cash conversion cycle) (Related to Checkpoint 18.1 on page 617)
A business can receive 20 days’ credit from its supplier on raw materials purchased.
It will take the business 25 days to convert the raw material into a saleable product.
Customers in this sector will pay their invoices 40 days after purchase.
a. What is the length of the operating cycle, assuming products are sold as soon as completed?
b. How does this differ from the cash conversion cycle?
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Related Book For 
Financial Management Principles And Applications
ISBN: 9781292222189
13th Global Edition
Authors: Sheridan Titman, Arthur Keown, John Martin
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