Suppose That Freddy's Fries Has Annual Sales of $500,000, Cost

question 74

Multiple Choice

Suppose that Freddy's Fries has annual sales of $500,000, cost of goods sold of $375,000, average inventories of $9,000, and average accounts receivable of $25,000. Assuming that all of Freddy's sales are on credit, what will be the firm's operating cycle?

• A) 27.01
• B) 18.25
• C) 8.76
• D) 9.49

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Definitions:

Bond Fund

A mutual fund that invests primarily in bonds and other debt securities to generate returns.

Ordinary Annuity

A series of equal payments made at regular intervals, with the interest compounding period matching the payment period, such as annually.

Expressed

Articulated or conveyed in words, symbols, or in another explicit manner.

Years

Units of time equal to 365 days (or 366 in a leap year), used as a measure of time duration or age.