On Average, Stuff for Less Is Able to Sell Their

question 307

Multiple Choice

On average, Stuff for Less is able to sell their inventory in 23 days. Stuff for Less takes 60 days on average to pay for their purchases. On the other hand, their average customer charges their purchase on a credit card whereby payment is received in 15 days. Given this information, what is the length of operating cycle?

• A) 8 days
• B) 38 days
• C) 45 days
• D) 68 days
• E) 75 days

---

Definitions:

Net Cash Inflow

The difference between all cash received and all cash spent by a company during a specific period.

Investing Activities

Transactions involving the purchase and sale of long-term assets and other investments, not including cash equivalents.

Loans Receivable

Financial assets representing money lent by an entity to a third party, for which the lender expects repayment.

Accounts Receivable

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