A Firm Has an Average Age of Inventory of 101

question 85

Multiple Choice

A firm has an average age of inventory of 101 days, an average collection period of 49 days, and an average payment period of 60 days. The firm's inventory turnover is ________.

• A) 3.2
• B) 4.0
• C) 2.5
• D) 3.6

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Definitions:

Deadweight Loss

See efficiency loss.

Marginal Cost

The increase in expenditure incurred from making one more unit of a product or service.

Marginal Benefit

The extra benefit or utility received from the consumption or production of an additional unit of a product or service.

Public Goods

Goods or services that are available for consumption by everyone and where use by one individual does not reduce availability to others.