A Firm Has Annual Operating Outlays of $1,800,000 and a Cash

question 95

Multiple Choice

A firm has annual operating outlays of $1,800,000 and a cash conversion cycle of 60 days. If thefirm currently pays 12 percent for negotiated financing and reduces its cash conversion cycle to 50days, the annual savings is __________.

• A) $50,000
• B) $6,000
• C) $200,000
• D) $216,000

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Definitions:

Obesity

A condition defined by an excessive accumulation of body fat, posing a risk to an individual's health and associated with various diseases like diabetes and heart disease.

Reaction Time

The duration it takes for an individual to respond to a stimulus.

Stimulus

An event or object that evokes a specific functional reaction in an organ or tissue.

Formal Operational Thought

A stage in Piaget's cognitive development theory (beginning around age 12) where individuals develop the ability to think abstractly, logically, and systematically.