The Operating Cycle Allows Firms to Estimate

question 15

Multiple Choice

The operating cycle allows firms to estimate

• A)the average time between when a firm pays cash for its inventory purchases and when it receives cash for its sales
• B)the average time a firm must keep any borrowed funds
• C)the average time required for a firm to acquire inventory, sell it, and collect the proceeds
• D)the amount of cash a firm needs to be profitable

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Definitions:

Different Scale

Often related to the concept of economies or diseconomies of scale, indicating variations in cost or production efficiency depending on the size of operations.

Hourly Wages

The rate of pay that an employee receives for each hour of work.

Full-time Employees

Workers who are contracted by an employer to work the standard number of hours defined by the employer, typically with benefits such as health insurance and paid leave.

CEO Compensation

Refers to the total remuneration package, including salary, bonuses, stock options, and other benefits, that a Chief Executive Officer receives for their role in an organization.