A Cash Conversion Cycle of -5 Days Is Better Than

question 48

True/False

A cash conversion cycle of -5 days is better than a cash conversion cycle of 50 days.

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Definitions:

Cash Payback Period

The time it takes for an investment to generate an amount of cash equal to the initial investment cost.

Negligible Residual Value

A term used to describe an asset's end-of-life value that is considered to be insignificantly small or practically zero.

Cash Payback Period

The cash payback period is the duration of time it takes for an investment to generate enough cash flow to recover its original cost.

Residual Value

The estimated salvage value of an asset at the end of its useful life.