CASH CONVERSION CYCLE Zocco Corporation has an inventory conversion period of 75 days, an average collection period of 38 days, and a payables deferral period of 30 days. a. What is the length of the cash conversion cycle? b. If Zocco’s annual sales are $3,421,875 and all sales are on credit, what is the investment in accounts receivable? c. How many times per year does Zocco turn over its inventory? Assume that cost of goods sold is 75% of sales.

CASH CONVERSION CYCLE Zocco Corporation has an inventory conversion period of 75 days, an average collection period of 38 days, and a payables deferral period of 30 days. a. What is the length of the cash conversion cycle? b. If Zocco’s annual sales are $3,421,875 and all sales are on credit, what is the investment in accounts receivable? c. How many times per year does Zocco turn over its inventory? Assume that cost of goods sold is 75% of sales.

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter16: Supply Chains And Working Capital Management

Section: Chapter Questions

Problem 11P

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