Which One of the Following Statements Is Correct If a Firm

question 28

Multiple Choice

Which one of the following statements is correct if a firm has a receivables turnover of 10?

• A)It takes the firm 10 days to collect payment from its customers.
• B)It takes the firm 36.5 days to sell its inventory and collect the payment from the sale.
• C)It takes the firm an average of 36.5 days to sell its items.
• D)The firm collects its credit sales in an average of 36.5 days.
• E)The firm has ten times more in accounts receivable than it does in cash.

Evaluate the rationality behind purchasing insurance and warranties despite the cost exceeding expected claims.

Identify how individual differences in risk aversion affect financial decisions and utility.

Understand the concept of a fair insurance policy and how it is determined.

Understanding the concept of fair and unfair insurance policies.

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Definitions:

UCC

Stands for Uniform Commercial Code, a comprehensive set of laws governing all commercial transactions in the United States to harmonize the law of sales and other commercial transactions.

Breached Contract

An agreement that has been broken or violated by one or more of the parties involved.

Statute Of Limitations

A law prescribing the maximum period within which legal action can be taken for a specific offense or civil wrong.

Warranty Claim

A formal request made by a purchaser regarding a defect in a product that is covered under a warranty, seeking repair, replacement, or compensation.