Your fiRm Has an Inventory Turnover Rate of 22, a Payables

question 264

Multiple Choice

Your firm has an inventory turnover rate of 22, a payables turnover rate of 9, and a receivables turnover rate of 17. How long is your firm's operating cycle?

• A) 38.06 days
• B) 48.00 days
• C) 53.98 days
• D) 62.03 days
• E) 78.62 days

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Definitions:

Income

Money received on a regular basis from work, property, investments, business ventures, and other sources, used to fund consumption and savings.

Laspeyres Index

A price index used to measure the change in the cost of purchasing a fixed basket of goods and services of the same type and quantity over time.

Prices

The amounts of money required to purchase goods or services, setting the economic value of said goods or services in the market.

Consumption Bundle

A combination of goods and services that a consumer chooses to consume.