Asked by Keariel Threatt on Jul 23, 2024
Verified
Wislon, Inc. has an inventory turnover rate of 15, an accounts payable period of 54 days and an accounts receivable period of 37 days. What is the length of the cash cycle?
A) -7.33 days
B) -2.00 days
C) 2.00 days
D) 6.50 days
E) 7.33 days
Inventory Turnover Rate
A measure of how many times a company's inventory is sold and replaced over a specific period.
Accounts Payable Period
The average duration a company takes to pay off its suppliers and creditors, usually measured in days.
Accounts Receivable Period
The mean duration required by a company to receive payments from clients following a sale transaction.
- Calculate the length of the cash cycle using turnover rates and payment periods.
Verified Answer
Learning Objectives
- Calculate the length of the cash cycle using turnover rates and payment periods.
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