A High Receivable Turnover Indicates That

question 3

Multiple Choice

A high receivable turnover indicates that

• A) many customers are defaulting on their debts.
• B) a large proportion of the company's sales is on cash.
• C) the company's inventory is moving very quickly.
• D) customers are making payments very quickly.

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Definitions:

Production Possibilities Frontier

A graph that represents the highest possible production levels for two or more products, based on available inputs such as resources and labor.

Opportunity Costs

The cost of forgoing the next best alternative when making a decision, crucial in evaluating the true cost of any economic choice.

Law of Increasing Costs

An economic principle stating that as the production of one good increases, the opportunity cost of producing an additional unit of this good also increases, assuming all resources are fully utilized.

Capacity Utilization Rate

A measure of how efficiently a firm or economy is using its productive capacity, often expressed as a percentage of total potential output.