A firms operating cycle (OC) is 110 days and its cash conversion cycle (CCC) is...
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Finance
A firms operating cycle (OC) is 110 days and its cash conversion cycle (CCC) is 30 days. The amount of resources needed to support its CCC include is $132,000 of inventory and $45,000 of cash.
a. What does the firms operating cycle (OC) measure? (3 points)
b. What does the firms cash conversion cycle (CCC) measure? (3 points)
c. Why is the firms OC different from its CCC? Why is it important for the firm to know both cycles? (4 points)
d. What do the resources needed to support its the CCC indicate to the firm? Why is it important for the firm to know these amounts? (4 points)
e. Suppose the firm wants to shorten its CCC. (3 points each)
i. Why would the firm want to shorten its CCC?
ii. What is one way it can shorten its CCC?
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