Which One of the Following Statements Concerning the Cash Cycle

question 42

Multiple Choice

Which one of the following statements concerning the cash cycle is correct?

• A) The cash cycle is equal to the operating cycle minus the inventory period.
• B) A negative cash cycle is actually preferable to a positive cash cycle.
• C) Granting credit to slower paying customers tends to decrease the cash cycle.
• D) The cash cycle plus the accounts receivable period is equal to the operating cycle.
• E) The most desirable cash cycle is the one that equals zero days.

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Definitions:

Organizational Financial Performance

Refers to how well an organization is performing in terms of generating revenue, profits, return on investment, and overall financial health.

Organizational Commitment

The psychological attachment an employee has towards their organization, influencing their willingness to continue working there.

Conscientiousness

A personality trait characterized by organization, dependability, and a strong sense of duty or responsibility.

Big Five

A psychological theory describing five core dimensions of human personality: Openness, Conscientiousness, Extraversion, Agreeableness, and Neuroticism.