An Unexpected Increase in Inventories Has a Positive Effect on Future

question 194

True/False

An unexpected increase in inventories has a positive effect on future production.

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Definitions:

Precautionary Demand

Precautionary demand refers to the desire to hold cash or easily liquidatable assets to safeguard against unexpected financial needs or market fluctuations.

Unexpected Opportunities

Situations or prospects that arise unexpectedly, offering potential benefits or advantages not initially planned for.

Cash Conversion Cycle

A metric that shows the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.

Operating Cycle

The period between the acquisition of inventory and the collection of cash from receivables.