What Will the Change in the Value of Cash-To-Cash Cycle

question 23

Multiple Choice

What will the change in the value of cash-to-cash cycle if , AR_d is reduced by 4 days and I_d is increased by 3 days while all other things remain the same?

• A)Increase by 7 days
• B)decrease by 7 days
• C)Increase by 1 day
• D)Decrease by 1 day
• E)Unchanged

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Definitions:

Price Hike

An increase in the price of goods or services, which can be due to various factors including increased production costs or higher demand.

Net Operating Income

A measure of a company’s profitability, calculated as revenues less operating expenses excluding taxes and interest.

Traceable Fixed Expense

A fixed cost that can be directly linked to a specific segment of the business and would be eliminated if the segment ceased operations.

Percentage Change

A calculation that shows how much a quantity has increased or decreased in percentage terms over a period.