Finance Objective Questions - Cash Conversion Cycle Greater Than or Equal to Zero and How to Calculate Cash Conversion Cycle


1. The cash conversion cycle as conventionally computed must be a number greater than or equal to zero.

True or False

2. The cash conversion cycle is calculated as: 

  1. Days in Inventory + Collection Period 
  2. Days in Inventory - Payables Period 
  3. Days in Inventory + Collection Period + Payables Period 
  4. None of the above


These two objective questions belong to Finance and they deal with cash conversion cycle must be greater than or equal to zero and the second question is about how to measure cash conversion cycle.

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