If a Firm Has a Cash Cycle of 32 Days

question 43

Multiple Choice

If a firm has a cash cycle of 32 days and an operating cycle of 52 days, what is its payables turnover?

• A) 7.02
• B) 11.41
• C) 18.25
• D) 20.00

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Definitions:

Debt of Another

Debt of another involves liabilities or obligations that one party assumes on behalf of another party, typically through a guarantee or cosigning arrangement.

Uniform Electronic Transactions Act

A law adopted by many states in the U.S., which gives legal validity to electronic signatures and records in commercial transactions.

Statute of Frauds

A legal principle that requires certain types of contracts to be in writing and signed to be enforceable.

Parol Evidence Rule

A legal principle in contract law that prevents parties from presenting extrinsic evidence of prior or contemporaneous negotiations to alter or contradict the terms of a written agreement.