If a Firm Has a Cash Cycle of 39 Days

question 78

Multiple Choice

If a firm has a cash cycle of 39 days and an operating cycle of 88 days, what is its average payment period?

• A) 39 days
• B) 49 days
• C) 88 days
• D) 127 days

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Definitions:

Government Benefits

Financial assistance programs provided by the government to individuals or groups to support their income, health, education, or welfare.

Double Taxation

A phenomenon where income is taxed twice, typically once at the corporate level and again at the individual level when distributed as dividends.

Corporations

Legal entities that are separate from their owners, with the ability to own assets, incur liabilities, and sell stock.

Shareholders

Individuals or institutions that own one or more shares of stock in a public or private corporation, giving them partial ownership of the company.