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A Firm Has an Average Age of Inventory of 60

question 98

Multiple Choice

A firm has an average age of inventory of 60 days, an average collection period of 45 days, and an average payment period of 30 days. The firm's operating cycle is ________ days.


Definitions:

Average Rate of Return

A financial metric used to calculate the average annual return on an investment or project over its lifetime.

Total Income

The sum of all earnings or revenues generated by an individual or entity within a specific period.

Residual Value

The estimated value that an asset will realize upon its sale at the end of its useful life.

Net Present Value

A financial metric that calculates the value of a series of cash flows by discounting them to the present date, used to assess the profitability of investments.

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