Which One of the Following Will Decrease the Operating Cycle

question 122

Multiple Choice

Which one of the following will decrease the operating cycle?

• A) An easing of the accounts receivable collection policy.
• B) Additional inventories are kept on hand.
• C) The customer discount for early payment is discontinued.
• D) Suppliers offer a bonus discount for early payment.
• E) The inventory turnover changes from 9 to 10.

---

Definitions:

Consumer Surplus

The variegation between the preferred payment amount by consumers for a good or service and their final payment amount.

Producer Surplus

The discrepancy between the price at which producers are prepared to sell a product and the actual price they obtain.

Consumer Surplus

A mismatch between the price consumers feel prepared to pay for a good or service, and the actual outlay.

Competitive Price

A price that is in line with or slightly below the market average, aiming to attract customers in a competitive environment.