How High Can Accounts Receivable Be Before the Firm's Receivables

question 116

Multiple Choice

How high can accounts receivable be before the firm's receivables period exceeds 50 days, if annual sales equal $5 million and the cash conversion cycle equals 75 days?

• A) $342,466
• B) $684,932
• C) $1,027,397
• D)$1,712,329

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Definitions:

No Arrival, No Sale

A contractual clause that voids a sale if the goods do not arrive at their destination, protecting buyers in international trade.

Shipment Contract

A shipment contract is an agreement where the seller is obligated to send goods to a designated location, but the risk of loss passes to the buyer once the seller gives the goods to a carrier.

Temperament

The inherent part of an individual's personality, including mood, disposition, and reactions, often evident from early infancy.

Intelligence

The ability to acquire knowledge, think abstractly, and solve problems effectively.