PRIN.OF CORPORATE FINANCE (LL) >CUSTOM<
PRIN.OF CORPORATE FINANCE (LL) >CUSTOM<
12th Edition
ISBN: 9781260439137
Author: BREALEY
Publisher: MCG CUSTOM
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Chapter 29, Problem 1PS
Summary Introduction

To determine: The cash cycle of company E.

Cash cycle is the overall circulation or cycle of cash commences from the payment of raw materials and ends with receipt of cash on goods sold.

Cash cycle=[Inventory holding period+Accounts receivables period Accounts payable period]

Expert Solution & Answer
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Explanation of Solution

Computation of cash cycle is as follows:

PRIN.OF CORPORATE FINANCE (LL) >CUSTOM<, Chapter 29, Problem 1PS

Therefore, the cash cycle of the company E is 137 days.

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