Larson Cashmere Company Invests a Large Sum of Money in Retail

question 23

Multiple Choice

Larson Cashmere Company invests a large sum of money in retail stores located in a foreign country.Larson intends to bring its foreign earnings back home to the United States.This practice is known as:

• A)repatriation of profits.
• B)inflow profit streaming.
• C)expropriation.
• D)return of earnings.

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Definitions:

Operating Cycle

The time period that starts with the purchase of raw materials and ends with the collection of receivables generated from sales, measuring how long it takes for a business to turn expenditures into cash from sales.

Inventory Turnover

A ratio indicating how many times a company has sold and replaced inventory over a specific period, showing efficiency in managing stock.

Cash Cycle

The duration between the outlay of cash for the purchase of inventory and the collection of cash from customers, reflecting the efficiency of a company's cash management.

Payables

Financial obligations or amounts owed by a business to its suppliers or creditors for goods and services received.