An Arrangement in Which the Firm Allows Another the Right

question 73

Multiple Choice

An arrangement in which the firm allows another the right to use an entire business system in exchange for fees, royalties, or other forms of compensation is known as ________.

• A) franchising
• B) licensing
• C) outsourcing
• D) offshoring

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Definitions:

Receivables Turnover Ratio

A financial metric that measures how effectively a company collects on its outstanding accounts receivable in a given period.

Liquidity

The ability of an asset to be converted into cash quickly without significant loss of value, indicating a company's capacity to meet its short-term obligations.

Receivables Turnover Ratio

A measure of how efficiently a company collects cash from its credit sales, calculated by dividing net credit sales by average accounts receivable.

Statement of Financial Position

A financial report that details an organization's assets, liabilities, and shareholders' equity at a specific point in time, providing a snapshot of its financial condition.