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DOLLAR BILL'S, a retail store in New York City, buys its inventory on credit
DOLLAR BILL'S, a retail store in New York City, buys its inventory
on credit. Upon purchase, it is given 30 days in which to pay its suppliers. It sells all of its merchandise on credit. It extends 60 days of credit to its customers. Its inventory turnover rate is 60 days.
Situation 1
Using the Cash Conversion Model, measure DOLLAR BILL'S financing cycle in both days and money ($US) using the following assumptions:
-Sales of $730,000
-Gross Margin of 30%
-Financing Rate 61/2%My question if I want to find the CCC how can I use the financing Rate to find the DPO in $?
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