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Bouquet Company is concerned about cash management. The average age of inventories is 90 days, while account receivables are collected in 60 days. Accounts payable
Bouquet Company is concerned about cash management. The average age of inventories is 90 days, while account receivables are collected in 60 days. Accounts payable are paid approximately 30 days after they arise. a) Calculate the firms operating cycle b) Calculate the firms cash conversion cycle c) A competitor for Bouquet Company which is East Resources Company has a cash conversion cycle period of 90 days. Based on your answer in question 3(b), do you think Bouquet Company Company has a better cash conversion cycle than its competitor? Explain why?
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