On Average Your Firm Sells $43,209 of Items on Credit

question 132

Multiple Choice

On average your firm sells $43,209 of items on credit each day. Your average inventory period is 32 days and your operating cycle is 57 days. What is your average accounts receivable balance?

• A) $432,090
• B) $878,406
• C) $1,080,225
• D) $1,382,688
• E) $2,462,913

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Definitions:

Natural Monopoly

A type of monopoly that occurs when a single firm can supply a market with a good or service more efficiently and at a lower cost than could be achieved by multiple competing firms, due to economies of scale.

Network Effects

The effect that additional users of a product or service have on the value of that product to others, where the value increases as more people use it.

Substantial Network

A concept in economics and business that typically refers to a network within a market that has a significant user base or utility, making it valuable and influential.

Marginal Revenue

Marginal revenue is the additional income generated from the sale of one more unit of a good or service.