A Circular Flow Model Shows the Interrelationship Between the ________

question 118

Multiple Choice

A circular flow model shows the interrelationship between the ________ market and the ________ markets.

• A)household;goods
• B)business;household
• C)expenditure;income
• D)household;factor
• E)goods;factor

Determine the average amount of disbursement float for a firm based on check writing and clearing times.

Apply the Miller-Orr model to find the optimal cash balance limit for a firm.

Calculate the net present value (NPV) of adopting a lockbox system for cash collections.

Understand and calculate the amount of average daily receipts from customers.

---

Definitions:

Merchandise

Goods or products that are bought and sold in business transactions.

Discount Period

The time frame during which a discount is available or applicable, often used in the context of notes payable or receivable.

Sales Returns

Sales returns refer to the process of refunding a customer for the return of goods, which results in a reduction of revenues on the seller's financial statements.