Marion Industries has an average accounts receivable turnover ratio of 12 times per year whereas most of its competitors have a ratio nearer to 8 times. This suggests that Marion's management should consider:Marion Industries has an average accounts receivable turnover ratio of 12 times per year whereas most of its competitors have a ratio nearer to 8 times. This suggests that Marion's management should consider:

Question

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Respuesta :

andromache andromache · Answer 1 · 2021-01-20T02:14:05+01:00

Answer:

C. using more liberal credit terms to increase sales

Explanation:

As in the question it is mentioned that the ratio of account receivable turnover has determined that it has 12 times which means it takes 30 days

= 365 ÷ 12

= 30.41

= 30 days

Now the competitor has a ratio of account receivable turnover is 8 times which means it takes 45 days

So Marian management should considered that more liberal credit terms should be used in order to rise the sales

Therefore the option c is correct