In the Table Below the Information for Four Companies Is

question 213

Multiple Choice

In the table below the information for four companies is provided. $$\begin{array} { | l | c | c | } \hline \text { Compary } & \begin{array} { c } \text { Accounts Receivable } \\\text { turnover }\end{array} & \text { Average collection period } \\\hline \text { Martin } & 13.9 & 26.3 \\\hline \text { Lewis } & 13.3 & 27.4 \\\hline \text { Danforth } & 10.4 & \mathbf { 3 5 . 1 } \\\hline \text { Gamer } & 14.5 & 25.2 \\\hline \text { Industry Average } & 13.0 & 28.1 \\\hline\end{array}$$ Assuming all four companies are in the same industry, which company appears to have the greatest likelihood of paying its current obligations?

• A) Martin
• B) Lewis
• C) Danforth
• D) Garner

---

Definitions:

Market Failure

A situation in which the allocation of goods and services by a free market is not efficient, leading to a potential welfare loss.

Government Failure

A situation where government intervention in the economy causes inefficiencies or leads to a misallocation of resources.

Government Intervention

Actions taken by a government to affect or control various aspects of the economy, such as regulations, subsidies, tariffs, and taxes to correct market failures and promote economic stability.

Regulatory Capture

A situation where regulatory agencies are dominated by the industries they are supposed to be regulating, leading to decision making that benefits the industry at the expense of the public good.