Which of the Following Statements Regarding Operating Cycles Are True

question 92

Multiple Choice

Which of the following statements regarding operating cycles are true?

• A) The firm's cash cycle is the portion of the operating cycle that the firm must finance.
• B) Is the time required to acquire raw materials and to produce, sell, and receive payment for the finished goods.
• C) The firm's cash cycle is the operating cycle minus the average payment period.
• D) all of the above

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Definitions:

Margin of Safety

The difference between actual or projected sales and the break-even sales level, used to assess risk and financial stability.

Variable Costs

Financial outlays that adjust based on the quantity of products made or the scale of sales transactions.

Fixed Costs

Business expenses that do not change in proportion to the level of goods or services that a company produces over a short term.

CVP Income Statement

A financial statement that shows the effects of changes in cost and volume on a company's profits, based on Cost-Volume-Profit analysis.