For a Levered Firm,an Additional 3-Day Delay in Paying Suppliers

question 76

Multiple Choice

For a levered firm,an additional 3-day delay in paying suppliers will

• A)reduce the firm's long-term external financing need.
• B)increase the firm's stock-out costs.
• C)increase the cash cycle by 3 days.
• D)reduce the operating cycle by 3 days.
• E)not affect the cash cycle.

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Definitions:

Customer Service

The support and guidance given by a business to its customers who purchase or utilize its goods or services.

Logistics

The process of planning, implementing, and controlling the efficient, effective flow and storage of goods, services, and related information from point of origin to point of consumption.

Marketing

The activities, strategies, and processes used to promote and sell products or services to a target audience.

Customer Profitability Analyses

The method of determining the profit margin and overall profitability of individual customers to guide business strategies.