Bhattia Inc

question 302

Multiple Choice

Bhattia Inc. has credit terms of 2/15, net 60. Based on experience, 70% of all customers will take the discount. Given this information, calculate average collection period.

• A) 27.00 days
• B) 28.50 days
• C) 30.00 days
• D) 31.50 days
• E) 33.00 days

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Definitions:

Creditors

Individuals or institutions that lend money or extend credit to others, with the expectation of being paid back with interest.

Price-Earnings Ratio

The ratio for valuing a company that measures its current share price relative to its per-share earnings, widely used by investors to assess the market's valuation of a stock relative to its earnings performance.

Financial Statements

Reports that summarize the financial performance, position, and cash flows of a business for a specified period.

Book Values

The value of an asset as recorded on the company’s balance sheet, calculated as the cost of the asset minus any depreciation, amortization, or impairment costs.