Zarruk Construction's DSO Is 50 Days (On a 365-Day Basis),accounts

question 113

Multiple Choice

Zarruk Construction's DSO is 50 days (on a 365-day basis) ,accounts receivable are $100 million,and its balance sheet shows inventory of $125 million.What is the inventory turnover ratio?

• A)4.73
• B)5.26
• C)5.84
• D)6.42
• E)7.07

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Definitions:

Internal Rate of Return

The discount rate that makes the net present value (NPV) of all cash flows from a particular project equal to zero, used in capital budgeting.

Independent Projects

Projects in a company that can be selected or rejected independently of one another, without affecting the profitability or potential of other projects.

Conventional Cash Flows

A series of net income figures expected to be generated by an investment, starting with a negative cash flow at the beginning (investment outlay), followed by a series of positive cash flows.

Internal Rate of Return

The rate of discount at which the total net present value of a project or investment's cash inflows and outflows balances out to zero.