Money Is Functioning as a Store of Value When You

question 4

Multiple Choice

Money is functioning as a store of value when you

• A)Use it to compare the cost of tuition 10 years ago to the cost today.
• B)Take out a student loan to buy books.
• C)Save your cash to pay for tuition next semester.
• D)Pay your tuition in installments rather than all at one time.

---

Definitions:

Current Assets

Short-term assets that a company owns, which are expected to be converted into cash within one year, such as inventory, cash, and accounts receivable.

Average Collection Period

A financial metric that measures the average number of days it takes a company to collect payments from its credit sales.

Fixed Assets

Long-term tangible assets held for business use and not expected to be converted to cash in the upcoming fiscal year, such as machinery, buildings, and land.

Full Capacity

The maximum level of output that a company can sustain over a long period without increasing its resources.