Which of the Following Statements Is Most Likely Correct for a Firm

question 35

Multiple Choice

Which of the following statements is most likely correct for a firm with an average collection period of 90 days?

• A) Its average daily sales are low.
• B) Its average daily sales are high.
• C) Its current ratio will be high.
• D) It is providing financing for approximately 25% of its annual sales.

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Definitions:

Euros

The official currency of the eurozone, which is used by 19 of the 27 European Union countries.

Downsloping

Describes a line or curve on a graph that proceeds from upper left to lower right, often used in economics to represent the decrease in demand as prices increase.

Foreign Exchange Market

The global marketplace for buying and selling national currencies, determining exchange rates.

Country X's Currency

The official medium of exchange issued and controlled by a particular country, identified uniquely to that country.