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:

U.S. Dollar

The official currency of the United States, commonly used worldwide as a standard of exchange.

Functional Currency

The main currency used by a business or unit within a company for accounting purposes, reflecting the primary economic environment in which it operates.

Pound Sterling

The official currency of the United Kingdom, which is one of the world's oldest currencies still in use.

Accounts Receivable

Money owed to a business by its customers for goods or services that have been delivered but not yet paid for.