The Days-In-Receivables Ratio

question 15

Multiple Choice

The days-in-receivables ratio:

• A) is an estimate of the length of time the receivables have been outstanding.
• B) measures the cash discount period for credit sales.
• C) is net credit sales divided by average receivables.
• D) is not meaningful and therefore is not used.

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Definitions:

Marginal Cost

The cost incurred to produce one additional unit of a product or service.

Equilibrium Price

The price at which the quantity of a good demanded equals the quantity of that good supplied.

Tax Implications

The effects that taxes have on the financial outcomes of activities, including the impact on overall costs and benefits in business and personal finance.

Point Elasticity

The measure of elasticity at a specific point on a demand or supply curve, reflecting the sensitivity of quantity demanded or supplied to a change in price.