Dahn Corporation Has Provided the Following Financial Data

question 159

Multiple Choice

Dahn Corporation has provided the following financial data: Dividends on common stock during Year 2 totaled $1,600. The market price of common stock at the end of Year 2 was $2.37 per share. The company's average sale period (turnover in days) for Year 2 is closest to:

• A)226.5 days
• B)60.1 days
• C)40.0 days
• D)64.4 days

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Definitions:

Cash Equivalents

Short-term, highly liquid investments that are readily convertible to known amounts of cash and so close to their maturity that they present insignificant risk of changes in value due to changes in interest rates.

Net Change

Net Change refers to the difference in a financial instrument's closing price between two consecutive trading sessions.

Cash Flows

The total amount of money being transferred into and out of a business, especially as affecting liquidity.

Income Recognition

The accounting principle that revenue should only be recognized after the business has fulfilled its obligations and the payment is certain.