In the Cash-To-Cash Cycle Calculation, If the Cost of Goods

question 1

Multiple Choice

In the cash-to-cash cycle calculation, if the cost of goods sold per day increases, but all other data such as average inventory and average payables and receivables remain the same, then the value of cash-to-cash cycle will

• A)go down
• B)go up
• C)stay the same
• D)May go up or down, but cannot tell without more information

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Definitions:

Quantity Supplied

The amount of a good or service that producers are willing to sell at a given price.

Price Floor

A government or group-imposed price control or limit on how low a price can be charged for a product.

Demand Decrease

A situation where the quantity of a product or service desired by buyers decreases, usually due to changes in consumer preferences, incomes, or prices of related goods.

Demand Equation

A mathematical representation expressing the relationship between the quantity of a good demanded and its price, along with other factors affecting demand.