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Amundsen of Norway Receives Raw Materials from Their Corporate Parent

Question 27

Multiple Choice

Amundsen of Norway receives raw materials from their corporate parent in the U.S. with payment terms of net 60 days. Most of their sales are to firms in Norway where normal payment terms are net 30 days. This causes a problem for the subsidiary with working capital management because


A) accounts receivable are so much longer than accounts payable.
B) accounts payable are so much longer than accounts receivable.
C) accounts receivable and accounts payable are equal.
D) this doesn't really cause a problem; in fact it is to the benefit of the Norwegian subsidiary.

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