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.

• A) 75
• B) 105
• C) 90
• D) 135

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Definitions:

Lemonade

A sweetened beverage made from lemon juice, water, and sugar, often consumed as a refreshing drink.

Gallons

A unit of volume used primarily in the United States for measuring liquids, equivalent to 3.785 liters.

Meals

Prepared food items intended for consumption, typically encompassing breakfast, lunch, and dinner.

Gasoline

A flammable liquid derived from petroleum, used primarily as fuel in internal combustion engines.