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.
Correct Answer:
Verified
Q26: TABLE 19.1
Use the information to answer following
Q27: In principle, the firm tries to minimize
Q28: In anticipation of a foreign exchange loss,
Q29: Which of the following actions will result
Q30: Which of the following statements is true?
A)A/R
Q32: One possible definition of net working capital
Q33: Political risk may motivate parent firms to
Q34: TABLE 19.1
Use the information to answer following
Q35: Increases to cash flows can be anticipated
Q36: Instruction 19.1: Use the information to answer
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents