Green Company has net credit sales of $100,000, an asset turnover ratio of 4, and a...

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Green Company has net credit sales of $100,000, an asset turnover ratio of 4, and a...

Green Company has net credit sales of $100,000, an asset turnover ratio of 4, and a receivables turnover ratio of 9. What is the average collection period?

11.1 days

36 days

40.6 days

25 days

please include the explanation

business accounting

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Answer 1

Answer #1

Average Collection Period = 365/ Account Receivables turnover ratio

= 365 days /9

=40.6 days

Correct Option: THIRD

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Answer 2

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