The Average Payment Period Is Computed by Dividing the Year-End

question 178

True/False

The average payment period is computed by dividing the year-end accounts payable amount by the firm's average cost of goods sold (COGS) per day.

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Definitions:

Treasury Bills

Short-term government securities issued at a discount from the face value and mature at par, representing a safe and liquid investment option.

Canadian Common Stocks

Equity shares issued by Canadian corporations, representing ownership in the company and entitling holders to dividends and voting rights.

NPV

Net Present Value; a financial metric used to evaluate the profitability of an investment, calculated by subtracting the present value of cash outflows from the present value of cash inflows.

TSX

The Toronto Stock Exchange, which is the largest stock exchange in Canada where securities are bought and sold.