A Company Has Days' Payable Outstanding of 70 Days

question 30

Multiple Choice

A company has days' payable outstanding of 70 days. If credit terms of purchases are 2/10, net 30, is the company paying accounts payable on a timely basis?

• A)Yes, days' payable outstanding exceeds the net period of 30 days.
• B)Yes, days' payable outstanding exceeds the discount period of 10 days and the net period of 30 days.
• C)No, days' payable outstanding exceeds the discount period of 10 days and the net period of 30 days.
• D)There is not enough information to make an assessment.

Understand the mechanisms and implications of stock repurchases for distributing excess cash.

Analyze the effects of dividend policy adjustments on firm growth and investor income.

Evaluate the significance of the signaling effect in dividend announcements and stock repurchase decisions.

Recognize the importance of timing in purchasing stocks to receive dividends.

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Definitions:

Prenatal Viral Exposure

Exposure to a virus in the womb during pregnancy, which can potentially lead to developmental disorders or health issues in the baby.

Schizophrenia

A serious psychological condition marked by disturbances in thinking, sensing, feeling, and relating to others.

Brain Abnormalities

Structural or functional deviations in the brain that can contribute to neurological and psychiatric conditions.

Early Viral Exposure

Encounter with a virus at an early age, which could influence immune system development and potentially affect health outcomes later in life.