Your Firm Deals Strictly with Three Customers

question 138

Multiple Choice

Your firm deals strictly with three customers. The average amount that each customer pays per month along with the collection delay associated with each payment is shown below. Given this information, what is the weighted average delay? Assume that every month has 30 days.

• A) 3.11 days
• B) 3.43 days
• C) 3.59 days
• D) 3.65 days
• E) 3.80 days

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Definitions:

Investment Revenue

Investment revenue is income generated from various types of investments, including dividends from stocks, interest on bonds, or income from rental properties.

Equity Method

The equity method is an accounting technique used to record investments in other companies, typically reflecting the owning company's fair share of the investee's net income.

Cash Dividends

Payments made by a corporation to its shareholders, usually as a distribution of profits.

Investment Account

An account held at a financial institution that is used to hold securities, cash, and other investments in the financial markets.