If a Firm Has a Cash Cycle of 20 Days

question 110

Multiple Choice

If a firm has a cash cycle of 20 days and an operating cycle of 60 days, what is its payables turnover?

• A) 8.06
• B) 9.13
• C) 20.00
• D) 40.00

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Definitions:

CAPM

The Capital Asset Pricing Model, a financial theory that describes the relationship between systematic risk and expected return for assets, particularly stocks.

Firm-Specific Factors

Unique characteristics or circumstances affecting a company that can influence its stock's performance, unrelated to the overall market movements.

Common Macroeconomic Factor

Economic variables that affect a broad segment of the economy and consequently can influence the performance and value of financial investments.

Uncertainty

The degree of variability in investment returns, often associated with the lack of predictability in markets and future events.