A fiRm Currently Has a 43 Day Cash Cycle

question 237

Multiple Choice

A firm currently has a 43 day cash cycle. Assume that the firm changes its operations such that it increases its receivables period by 2 days, decreases its inventory period by 1 day and increases its
Payables period by 3 days. What will the length of the cash cycle be after these changes?

• A) 38 days
• B) 39 days
• C) 41 days
• D) 43 days
• E) 45 days

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Definitions:

Nature of Competition

Refers to the characteristics and dynamics of rivalry among businesses in the same industry, which can influence market behavior and business strategies.

Porter's Five Forces

A model developed by Michael E. Porter that identifies and analyzes five competitive forces that shape every industry and help determine an industry's weaknesses and strengths.

E-commerce

The exchange of goods and services through the internet.

E-business

The conduct of business processes on the internet, including buying and selling goods, servicing customers, and collaborating with partners.