If a Firm Has a Cash Cycle of 8 Days

question 128

Multiple Choice

If a firm has a cash cycle of 8 days and an operating cycle of 39 days, what is its average payment period?

• A) 47 days
• B) 39 days
• C) 31 days
• D) 8 days

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Definitions:

Subject To

Conditional upon or dependent on something else; can indicate subjection to legal restrictions or conditions.

Personally Liable

Refers to the responsibility of an individual to cover debts or legal judgments out of their own assets.

Mortgage

A legal agreement in which property is used as collateral for the repayment of a loan.

Right of Contribution

The right that allows a party who has paid more than their share of a joint obligation to recover the excess paid from other parties responsible for the obligation.