The Time Between Ordering Materials and Collecting Cash from Receivables

question 51

Multiple Choice

The time between ordering materials and collecting cash from receivables is known as the:

• A)operating cycle
• B)cash conversion cycle
• C)accounts receivable period
• D)none of the above

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Definitions:

Indifference Curve

A curve representing all combinations of goods and services among which a consumer is indifferent, showing the same level of satisfaction or utility.

Budget Line

A graphical representation of all possible combinations of two goods or services that can be purchased with a given income and prices, identical to the concept of a budget constraint but rephrased.

Duality

Alternative way of looking at the consumer’s utility maximization decision: Rather than choosing the highest indifference curve, given a budget constraint, the consumer chooses the lowest budget line that touches a given indifference curve.

Marginal Utilities

Refers to the additional satisfaction or utility that a consumer receives from consuming one more unit of a good or service.