If a Firm's Inventory Turnover Is 4 and Days Sales

question 22

True/False

If a firm's inventory turnover is 4 and days sales outstanding (average collection period)is 60, then it takes approximately five months for newly acquired inventory to generate cash.

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Definitions:

Economic Growth

The increase in the inflation-adjusted market value of the goods and services produced by an economy over a period of time.

Entrepreneurship

The act of creating, organizing, and running a new business venture, typically characterized by risk-taking and innovation to achieve profit and growth.

Capital

Resources, especially financial assets, used to create goods, services, or wealth.

Production Possibilities Curve

A graphical representation showing the maximum quantity of two goods or services that can be produced with limited resources.