A firm that purchases raw materials on credits required by the credit terms to make payments within
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Question:
A firm that purchases raw materials on credits required by the credit terms to make payments within 30 days on its side the firm allows its credit buyers to pay within 60 days Its experience has been that it takes on average 35days to pay its accounts payable and 70 days to collect accounts receivable.
Moreover, 85 days elapse between the purchase of road materials and the sale of finished goods that is to say the average age of inventory is 85 days.
What is the firm's cash cycle?
Also, estimate the cash turnover.
Related Book For
Fundamentals Of Financial Management
ISBN: 9780273713630
13th Revised Edition
Authors: James Van Horne, John Wachowicz
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