Which One of the Following Will Shorten Both the Operating

question 396

Multiple Choice

Which one of the following will shorten both the operating and the cash cycles?

• A) A decrease in the length of time a firm takes to pay its suppliers.
• B) A change in the collection policy from net 30 to net 45.
• C) A decrease between the times a supplier is paid for a product and the time when payment is collected for that product.
• D) An increase in the accounts payable turnover rate.
• E) An increase in the number of times inventory is sold and replaced each year.

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Definitions:

Marginal Revenue

The additional income earned by selling one more unit of a good or service.

Marginal Costs

The change in total production cost that arises when the quantity produced is incremented by one unit.

Investment

The allocation of resources, usually money, in order to gain profitable returns as interest, income, or appreciation in value.

Workers

Individuals who perform tasks or jobs for pay, ranging from manual labor to professional occupations.