Ned's Co Has an Average Collection Period of 45 Days and and an Operating

question 182

Multiple Choice

Ned's Co. has an average collection period of 45 days and an operating cycle of 130 days. It has a policy of keeping at least $10 on hand as a minimum cash balance, and has a beginning cash
Balance for the first quarter of $20. Beginning receivables for the quarter amount to $35. Sales for
The first and second quarters are expected to be $110 and $125, respectively, while purchases
Amount to 80% of the next quarter's forecast sales. The accounts payable period is 90 days.
What are cash disbursements for the first quarter?

• A) $76
• B) $88
• C) $92
• D) $100
• E) $110

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Definitions:

General Adaptation Syndrome

A three-stage process that describes the physiological changes the body goes through when under stress: alarm, resistance, and exhaustion.

Alarm Reaction

The first stage of the GAS, which is triggered by the impact of a stressor and characterized by sympathetic activity.

Exhaustion Stage

The final phase of the stress response, as described by Hans Selye, characterized by depleted physical and mental resources, leading to burnout or health issues.

Resistance Stage

The second phase of the General Adaptation Syndrome, where the body mobilizes its defenses to cope with a stressor.