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9 March, 04:41

Brothers Breads has the following data. What is the firm's cash conversion cycle? Inventory conversion period = 50 days Average collection period = 17 days Payables deferral period = 25 daysa. 31 daysb. 34 daysc. 38 daysd. 42 dayse. 46 days

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  1. 9 March, 07:57
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    Option (D) is correct.

    Explanation:

    Given that,

    Inventory conversion period = 50 days

    Average collection period = 17 days

    Payables deferral period = 25 days

    Cash Conversion cycle:

    = Inventory Conversion Period + Average collection Period - Payables deferral Period

    = 50 days + 17 days - 25 days

    = 42 days

    Therefore, the firm's cash conversion cycle is 42 days.
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