Question
1.7 A company’s sales revenue for the year just ended was $28 million. The company earned a gross margin of 40% on sales. All sales and purchases were on credit.
The following balances have been extracted from the year end accounts:
Inventory $4 million
Accounts receivable $6 million
Accounts payable $3 million
Required:
Calculate, to the nearest day, the company’s cash operating cycle based on the year end figures.
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