Which One of These Actions Will Increase the Operating Cycle

question 41

Multiple Choice

Which one of these actions will increase the operating cycle? Assume all else held constant.

• A) Decreasing the payables period
• B) Decreasing the receivables turnover rate
• C) Increasing the payables period
• D) Decreasing the average inventory level
• E) Increasing the inventory turnover rate

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Definitions:

Summary Report

A summary report compiles and summarizes the key points and findings from detailed reports, providing an overview of the presented data.

Decentralization

The distribution of decision-making powers and authority away from a central location or authority to local or individual actors.

Authority

The legal or rightful power or right to make decisions, give orders, and enforce rules within a particular scope or role.

Operating Decisions

Choices made by management regarding the day-to-day operations of a business, such as pricing, inventory management, and employment levels.