The Time Between the Points at Which a Firm Pays

question 4

Multiple Choice

The time between the points at which a firm pays for raw materials and at which it receives payment for finished goods is

• A) the average age of inventory
• B) the cash conversion cycle
• C) the average collection period
• D) the operating cycle

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Definitions:

Investor

An individual or entity that allocates capital with the expectation of receiving financial returns.

National Saving

The total amount of savings in a country, equal to the sum of private and public savings; it represents the difference between a nation's income and consumption.

Public Saving

The difference between tax revenues and government spending, representing the amount of surplus or deficit in the government's budget.

Private Saving

The portion of households' income that is not used for consumption or paying taxes, and is instead saved.