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NEW QUESTION: 1
Big Toys, Inc. has a 34 day inventory period and a 23 day receivables period. The company purchases the toys which it sells from The Toy Co. under a 45 day payment arrangement. The Toy Co:
A. finances a portion of Big Toys' receivables period.
B. can be assured that Big Toys will be able to convert its inventory into cash before having to pay for that inventory.
C. receives payment for each shipment prior to Big Toys reselling the toys in the shipment.
Answer: A

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