How Long Will It Take $4,000 to Reach $4,500 When

question 16

Multiple Choice

How long will it take $4,000 to reach $4,500 when it grows at 8 percent per year?

• A) 1.12 years
• B) 1.48 years
• C) 1.53 years
• D) 9.00 years

Grasp the methodology and significance of Days Sales Outstanding (DSO) analysis in monitoring customer payments.

Understand the scope and challenges of working capital management, including current assets and liabilities.

Acknowledge the cost and complexity of the collection process in business operations.

Know the four major components of a firm's credit policy.

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Definitions:

Spot-Futures Parity

A financial theory stating that the spot and future prices of a commodity, currency, or security will converge at the futures contract's expiration.

Violation

An instance of failing to comply with a set rule, regulation, or standard.

Arbitrage Opportunities

Situations where a profit can be made with no risk by simultaneously buying and selling assets in different markets or forms due to price discrepancies.

Investors

Individuals or institutions that allocate capital with the expectation of receiving financial returns.