WORK IN PROCESS Definition

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WORK IN PROCESS is parts and subassemblies in the process of becoming completed finished goods.

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AVERAGE PAYMENT PERIOD (APP) is the number of days an entity takes to pay off credit purchases. As the average payment period increases, cash should increase as well, but working capital will remain the same. Formula: accounts payable / (total annual purchases / 360).

CAPITAL INVESTMENT see CAPITAL EXPENDITURE.

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