Principle of Finance (BUS-3331)

- makes it easy for a firm to see exactly where the company stands relative to its closest competition. Question 3 ( 1 point) The current ratio is a measure of a firm's ability to pay off short-term obligations with relying on the sale of inventorics. True False A firm has annual sales of $7,300,000 and accounts receivable of $560,000. Assume that it uses a 365 -day year. What is the firm's average collection period (ACP)? 26 days 27 days 28 days 29 days Based on the modified DuPont formula, if a firm has a Return on Common Equity (ROE) of 30%, a net profit margin (NPM) of 5%, and a total assets turnover (TAT) of 2 , what is its financial leverage multiplier (FLM)? FLM=4 FLM=3 FLM=2 FLM=1