Delta Distributors Has an Investment in Accounts Receivable of $3,000,000

question 42

Multiple Choice

Delta Distributors has an investment in accounts receivable of $3,000,000. Daily credit sales are $120,000. If 30% of Delta's credit customers receive a discount by paying within 10 days,what is the net period that Delta maintains?

• A) 10 days
• B) 23 days
• C) 38 days
• D) 45 days
• E) There is not enough information to tell.

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Definitions:

Net Change

The difference in an entity's value between two points in time, commonly used in reference to stock prices or financial performance.

Utility

The want-satisfying power of a good or service; the satisfaction or pleasure a consumer obtains from the consumption of a good or service (or from the consumption of a collection of goods and services).

Behavioral Economics

A field of economics that studies how psychological, cognitive, emotional, cultural, and social factors affect economic decisions of individuals and institutions.

Limited Knowledge

The state of having restricted information or understanding about a subject or situation, emphasizing incomplete or finite expertise.