Which One of the Following Statements Is Correct If a Firm

question 15

Multiple Choice

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

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

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Definitions:

Marginal Tax Rates

The rate at which the last dollar of income is taxed, thereby representing the rate of tax applied to each additional dollar of income.

Lease Payments

Regular payments made by the lessee to the lessor for the use of an asset.

Net Advantage

The beneficial difference or surplus resulting from comparing two or more options or situations, often used in evaluating financial decisions.

Taxes

Compulsory financial charges or levies imposed by a government on individuals, businesses, or other entities to fund government spending and services.