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Calculate the average balances in accounts receivable

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Problem - Stratosphere Wireless is examining its cash conversion cycle. The company expects its cost of goods sold, which equals 80 percent of sales, to be $480,000 this year. Stratosphere normally turns over inventory 24 times per year, accounts receivable are turned over 15 times per year, and the accounts payable turnover is 40.

Required -

(a) Calculate the cash conversion cycle.

(b) Calculate the average balances in accounts receivable, accounts payable, and inventory.

Reference no: EM132698805

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