ABC Historically Acquired Products That Were Held in Inventory Until

question 40

Multiple Choice

ABC historically acquired products that were held in inventory until they could be sold to a customer.The firm is now changing its policy and will only acquire a product when it receives an actual order from a customer.All else equal,this change will

• A)increase the operating cycle.
• B)shorten the accounts payable period.
• C)lengthen the accounts receivable period.
• D)decrease the cash cycle.
• E)decrease the inventory turnover rate.

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Definitions:

Market Value Ethics

The ethical considerations surrounding the determination and influence of the market value of goods and services.

Ethical Relativism

A system of ethical thought that says there is no objective or absolute standard of right and wrong.

Michael Sandel

An American political philosopher and professor, known for his writings on justice, ethics, and democracy.

Cost-Benefit Thinking

A system of thought that focuses on the consequences to one person or institution and then weighs the cost against the benefits of performing the action under scrutiny.