SwenCorp Had Sales of $154 Million This Year and an Average

question 100

Multiple Choice

SwenCorp had sales of $154 million this year and an average accounts receivable of $18 million per day. Its credit terms specify "2/14 net 40." On average, how long does it take to collect on its sales?

• A) 8.5 days
• B) 13 days
• C) 28 days
• D) 43 days

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Definitions:

Acquisition

The process by which a company purchases most or all of another firm's shares to gain control of that company.

Additional Paid-in Capital

Additional paid-in capital represents the amount investors have paid for shares above the nominal value during public offerings or private placements.

Date of Acquisition

The specific date on which an asset is purchased or acquired by an entity.

Par Value

The nominal or face value of a bond, share of stock, or coupon as stated by the issuer, which is often a minimal amount that bears no relation to its market price.