Use the Information Below to Answer the Following Questions

question 30

Multiple Choice

Use the information below to answer the following questions:
Alda Ltd’s average trade debtors for year ended 30 June 2012 was $150 000. Cost of goods sold was $382 500 and the gross margin was 15%. All sales are made on credit.
-What was the number of days' sales in receivables?

• A) 121.7 days
• B) 143.1 days
• C) it cannot be determined from the information provided
• D) 301.4 days.

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Definitions:

Higher Interest Rates

Increased costs of borrowing which can impact loan demand, savings rates, and overall economic activity.

Debt Covenants

Restrictions lenders put on borrowing agreements to maintain certain financial ratios and ensure the borrower's financial stability.

Signaling Function

The act of conveying information indirectly through actions or behaviors, often used in economics and finance to indicate future intentions or the current state of affairs.

Steady Flow

implies a constant and uniform rate of flow in processes, often used in the context of fluid dynamics and economic models.