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Tec Capital has 40 days of receivables, 42 days of inventory, and 38 days of payables. What is the net operating cycle (in days) for Tec Capital?

Answer :

The net operating cycle (in days) for tec capital is closest to 14 days. It is calculated by subtracting the number of days payable from the number of days receivable plus the number of days of inventory.

This is represented by the following equation:

Net operating cycle = Days receivable + Days inventory - Days payable.

Net operating cycle = 40 + 42 - 38 = 44 days.

However, the net operating cycle (in days) is the time it takes for the company to turn inventory into cash, so it is the number of days of receivables plus the number of days of inventory. Therefore, the net operating cycle (in days) for Tec Capital is calculated as: Net operating cycle = 40 + 42 = 82 days.

To find the closest answer to the net operating cycle (in days) for Tec Capital, we subtract the number of days of accounts payable from the number of days of receivables plus the number of days of inventory. This equation would be: Net operating cycle = 40 + 42 - 38 = 44 days. The net operating cycle (in days) for Tec Capital is therefore closest to 14 days.

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