Which One of the Following Statements Is Correct Concerning the Cash

question 20

Multiple Choice

Which one of the following statements is correct concerning the cash cycle?

• A)The longer the cash cycle, the more likely a firm will need external financing.
• B)Increasing the accounts payable period increases the cash cycle.
• C)A positive cash cycle is preferable to a negative cash cycle.
• D)The cash cycle can exceed the operating cycle if the payables period is equal to zero.
• E)Offering early payment discounts to customers will tend to increase the cash cycle.

---

Definitions:

Two-Factor Theory

A psychological theory that proposes that emotional experience is the result of a combination of physiological arousal and cognitive interpretation.

Reciprocity Norm

A social norm that expects individuals to help those who have helped them, fostering mutual support and cooperation.

Ingroup Bias

The tendency to favor one's own group over other groups.

Just-World Phenomenon

The cognitive bias to believe that the world is inherently fair and that therefore people get what they deserve.