John Has Been Trying to Find a Job for the Past

question 93

Multiple Choice

John has been trying to find a job for the past 6 months.He went for an interview at Aqua Inc.Although his performance was better than that of all the other candidates,the interviewers rejected him.They thought that they must have missed something about him that other employers noticed,which made them not hire him.This is an example of ________.

• A) a positive externality
• B) a negative externality
• C) moral hazard
• D) an information cascade

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Definitions:

Accounts Receivable

The money owed to a company by its customers for goods or services delivered but not yet paid for.

Average Collection Period

The average amount of time that a receivable is outstanding; calculated by dividing 365 days by the accounts receivable turnover.

Net Credit Sales

Total sales made on credit minus returns and allowances, indicating the actual sales revenue expected to be collected.

Vertical Analysis

A method of financial statement analysis in which each line item is listed as a percentage of a base figure, facilitating comparison across different periods.