If a Firm Has a Cash Cycle of 18 Days

question 86

Multiple Choice

If a firm has a cash cycle of 18 days and an operating cycle of 34 days, what is its payables turnover?

• A) 16.00
• B) 20.28
• C) 22.81
• D) 34.00

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Definitions:

NPV

Net Present Value, a financial metric used to analyze the profitability of an investment or project, calculated by subtracting the present value of cash outflows from the present value of cash inflows over a period of time.

Capital Budgeting

The process a business undergoes to evaluate potential major investments or expenses.

New Business Ventures

Initiatives or projects that involve starting a new business or expanding into new markets or products.

Equipment Replacement

The process of substituting old, worn-out, or obsolete equipment with newer, more efficient models or versions.