Which Activities Have Slack in the Following Diagram

question 56

Multiple Choice

Which activities have slack in the following diagram?

• A) A, C, D, F
• B) B, E
• C) A, C, D, E
• D) B, D, E

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Definitions:

Operating Cycle

The amount of time it takes for a business to buy inventory, sell that inventory, and collect cash from the sale.

Cash Cycles

The duration it takes for a business to convert its investments in inventory and other resources back into cash flows from sales.

Accepts Cash

A phrase indicating that a business or entity is willing to receive cash as a form of payment for goods or services.

Permanent Working Capital

The minimum amount of working capital that a company needs to operate continuously.