On Average, Stuff for Less Is Able to Sell Their

question 330

Multiple Choice

On average, Stuff for Less is able to sell their inventory in 23 days. Stuff for Less takes 60 days on average to pay for their purchases. On the other hand, their average customer charges their
Purchase on a credit card whereby payment is received in 15 days. Given this information, what is
The length of operating cycle?

• A) 8 days
• B) 38 days
• C) 45 days
• D) 68 days
• E) 75 days

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Definitions:

Decision Tree Analysis

A graphical representation of possible solutions to a decision based on different conditions, often used in business to strategize investments or processes.

NPV

Net Present Value (NPV) is a financial metric that calculates the present value of all future cash flows associated with an investment, minus the initial investment cost.

Risk

Exposure to the chance of loss or damage, often evaluated in financial terms for its potential impact on investment returns.

Sensitivity Analysis

A technique used to determine how different values of an independent variable will impact a particular dependent variable under a given set of assumptions.