ABC Company extends credit terms of 45 days to its customers. Its credit collection would be considered poor if its average collection period was

Solution

ABC Company extends credit terms of 45 days to its customers. The average collection period refers to the average number of days it takes for ABC Company to collect payments from its customers. In this case, if the average collection period is longer than the credit terms (45 days), it indicates poor credit collection. Among the given options, option e. 57 days represents a longer average collection period than the credit terms, indicating poor credit collection. Therefore, the correct answer is e. 57 days.