Which of the Following Statements Is FALSE

question 17

Multiple Choice

Which of the following statements is FALSE?

• A)A firm's cash cycle is the length of time between when the firm pays cash to purchase its initial inventory and when it receives cash from the sale of the output produced from that inventory.
• B)The longer a firm's cash cycle,the more working capital it has,and the more cash it needs to carry to conduct its daily operations.
• C)Most firms buy their inventory on credit,which increases the amount of time between the cash investment and the receipt of cash from that investment.
• D)Any reduction in working capital requirements generates a positive free cash flow that the firm can distribute immediately to shareholders.

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