An Increase in Which One of the Following Will Decrease

question 92

Multiple Choice

An increase in which one of the following will decrease the cash cycle,all else equal?

• A)payables turnover
• B)days sales in inventory
• C)operating cycle
• D)inventory turnover rate
• E)accounts receivable period

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Definitions:

Present Value

The value today of a future cash amount or series of payments, based on a particular rate of return.

Fair Value

The value received from selling an asset or the expense of transferring a liability in a regulated transaction among market players on the date of evaluation.

Sale of Receivables without Recourse

A financial transaction where a business sells its accounts receivable to a third party without the obligation to repay if the third party fails to collect the receivables.

Required Disclosure

Mandatory information that companies must provide in their financial statements to give a full and fair view of their financial performance and position.