Based on the Following Data for the Current Year, Compute

question 25

Multiple Choice

Based on the following data for the current year, compute the number of days' sales in accounts receivable? $\begin{array}{ll}\$ 800,000 & \text { Net sales on account during the year } \\300,000 & \text { Cost of merchandise sold during the yeat } \\45,000 & \text { Accounts receivable, be ginning of year } \\35,000 & \text { Accounts receivable, end of year } \\90,000 & \text { Inventory, be ginning of year } \\110,000 & \text { Inventory, end of year }\end{array}$

• A) 7.5
• B) 18.25
• C) 16.0
• D) 20.5

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Definitions:

Capital Investment Analysis

The process of evaluating and making decisions about capital expenditures or investments in projects that will have long-term implications for a business.

Net Present Value Method

A method used in capital budgeting to assess the profitability of an investment by calculating the present value of its expected cash flows minus the initial investment cost.

Average Rate of Return

A financial metric used to calculate the profitability of an investment, expressed as a percentage of the initial cost of the investment.

Total Income

The sum of all revenue and gains a company acquires before any expenses are subtracted.