A fiRm Has an Inventory Turnover Rate of 16, a Receivables

question 37

Multiple Choice

A firm has an inventory turnover rate of 16, a receivables turnover rate of 21 and a payables turnover rate of 11. How long is the operating cycle?

• A) 37.00 days
• B) 40.19 days
• C) 42.87 days
• D) 63.08 days
• E) 73.37 days

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Definitions:

Absolute Advantage

The ability of an entity to produce a good or offer a service more efficiently than its competitors when using the same amount of resources.

Absolute Advantage

The capability of an individual, company, or country to produce a good or service at a lower cost per unit than competitors.

Comparative Advantage

The ability of an entity to produce a good or service at a lower opportunity cost than another entity, leading to more efficient trade and production.

Comparative Advantage

The ability of an entity to produce a good or service at a lower opportunity cost than others.