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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 the cost of goods sold is 75% of sales.

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Fundamentals of Financial Manageme...

14th Edition
Eugene F. Brigham + 1 other
Publisher: Cengage Learning
ISBN: 9781285867977
BuyFind

Fundamentals of Financial Manageme...

14th Edition
Eugene F. Brigham + 1 other
Publisher: Cengage Learning
ISBN: 9781285867977

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Chapter
Section
Chapter 16, Problem 4P
Textbook Problem

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 the cost of goods sold is 75% of sales.

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