Which of These Activities Will Most Likely Result in an External

question 8

Multiple Choice

Which of these activities will most likely result in an external benefit?

• A)Ted purchases a dilapidated house and cleans up the yard and exterior of the house.
• B)Tim purchases an iPhone and downloads new apps.
• C)Terri purchases a new SUV and drives it to work every day.
• D)Thomas purchases a suit and wears it on his interviews.

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Definitions:

COGS

Cost of Goods Sold; the direct costs attributable to the production of the goods sold in a company, including material and labor costs.

Cash Cycle

The cash cycle is the period between the purchase of inventory and the collection of receivables from the sale of that inventory.

Receivables Period

The usual period a business needs to obtain payments from customers for goods or services sold on a credit basis.

Inventory Period

The time it takes for a company to turn its inventory into sales, often measured in days or weeks.