If a Firm Has a Cash Cycle of 10 Days

question 58

Multiple Choice

If a firm has a cash cycle of 10 days and an operating cycle of 43 days, what is its payables turnover?

• A) 11.06
• B) 36.5
• C) 8.48
• D) 33

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Definitions:

Constant Returns To Scale

A situation in which increasing all inputs by a certain factor leads to an increase in output by the same factor, indicating proportionate scaling in production.

Production

This refers to the process of creating goods and services through the combination of labor, materials, and technology.

Cost

The monetary value required to produce or acquire goods or services.

Competitive Firm

An individual company operating in a competitive market, where it has little to no control over the market price of its goods or services, and must accept the market price as given.