Which One of the Following Statements Is Correct If a Firm

question 73

Multiple Choice

Which one of the following statements is correct if a firm has a receivables turnover measure of 10?

• A) It takes a firm 10 days to collect payment from its customers.
• B) It takes a firm 36.5 days to sell its inventory and collect the payment from the sale.
• C) It takes a firm 36.5 days to pay its creditors.
• D) The firm has an average collection period of 36.5 days.
• E) The firm has ten times more in accounts receivable than it does in cash.

---

Definitions:

Tax Code

The laws and regulations governing the taxation process in a country.

Saving

The portion of income not spent on consumption but rather set aside for future use or investment.

Time Inconsistency

The phenomenon where a decision-maker's preferences change over time, leading to choices that may not align with their long-term goals.

Monetary Policy

The process by which a central authority, usually a central bank, controls the money supply and interest rates to achieve economic objectives.