The Average Length of Time Between the Purchase of Raw

question 8

Multiple Choice

The average length of time between the purchase of raw material and labor and the payment of cash for them is called the .

• A)cash conversion cycle
• B)inventory conversion period
• C)receivables collection period
• D)payables deferral period
• E)days sales outstanding

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Definitions:

External Equity Financing

This term refers to the process through which a company raises capital by selling its shares to external investors, outside the existing shareholders or company insiders.

Internal Growth Rate

The maximum growth rate a firm can achieve without external financing, based on reinvestment of its own earnings.

Financial Planning

The process of estimating the capital required and determining its competition. It is the process of framing financial policies in relation to procurement, investment and administration of funds of an enterprise.

Financing

The process of supplying capital for company operations, acquisitions, or investments.