Martin's Method Acting School Has a Current Ratio of 2

question 337

Multiple Choice

Martin's Method Acting School has a current ratio of 2, a quick ratio of 1.8, net income of $180,000, a profit margin of 10%, and an accounts receivable balance of $150,000. What is the firm's average
Collection period?

• A) 50 days
• B) 43 days
• C) 30 days
• D) 24 days
• E) 16 days

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Definitions:

Substitutes Exist

A situation in which multiple products or services can fulfill the same need or desire, allowing consumers to switch among them based on price, quality, or preference.

Raise Price

An action taken by producers or sellers to increase the cost at which goods or services are sold, often in response to market conditions.

Single Firm

Refers to an individual business entity that operates in a market, typically producing goods or services.

Monopoly

A market structure in which a single seller dominates the market for a particular good or service, without any close substitutes.