Which Statement Is True

question 53

Multiple Choice

Which statement is true?

• A)If a firm decreases its inventory period, its accounts receivable period will also decrease.
• B)The longer the cash cycle, the more cash a firm typically has available to invest.
• C)A firm would prefer a negative cash cycle over a positive cash cycle.
• D)Decreasing the inventory period will automatically decrease the payables period.
• E)Both the operating cycle and the cash cycle must be positive values.

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Definitions:

Peak

The highest point or maximum level of performance, achievement, or growth.

Intimacy

A close, familiar, and usually affectionate or loving personal relationship with another person or group.

Mutual Understanding

A state in which two or more parties possess a shared knowledge or perception regarding specific ideas, values, or situations, leading to enhanced communication and cooperation.

Closeness

The intimacy or degree of proximity and understanding between individuals, fostering strong bonds or relationships.