If Challenge Corporation Has Sales of $2 Million Per Year

question 68

Multiple Choice

If Challenge Corporation has sales of $2 million per year (all credit) and an average collection period of 35 days, what is its average amount of accounts receivable?

• A) $191,781
• B) $57,143
• C) $5,556
• D) $97,222

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Definitions:

Demand Curve

A diagram displaying how the cost of a product is connected to the consumer demand for it.

Cost Functions

A mathematical relationship expressing the cost of production as a function of the quantity of goods produced.

Brand Name

A name owned by a particular firm that distinguishes its products from those of other firms.

Economic Profit

The net gain of a company after deducting both its explicit and implicit expenditures from its aggregate revenue.