Which of the Following Statements Is FALSE

question 17

Multiple Choice

Which of the following statements is FALSE?

• A)A firm's cash cycle is the length of time between when the firm pays cash to purchase its initial inventory and when it receives cash from the sale of the output produced from that inventory.
• B)The longer a firm's cash cycle,the more working capital it has,and the more cash it needs to carry to conduct its daily operations.
• C)Most firms buy their inventory on credit,which increases the amount of time between the cash investment and the receipt of cash from that investment.
• D)Any reduction in working capital requirements generates a positive free cash flow that the firm can distribute immediately to shareholders.

Comprehend the role of time horizon in investment risk and return analysis.

Identify the efficient frontier and its significance in portfolio optimization.

Understand the relationship between bond duration and interest rates.

Identify the factors affecting bond price volatility.

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Definitions:

Monthly Profit

The total revenue generated by a business minus its expenses, taxes, and costs, calculated on a monthly basis.

Quality Check Department

A dedicated section within an organization focused on ensuring products or services meet quality standards through systematic inspection and testing processes.

Solver

A computational tool used in optimization that finds the best solution to a problem by varying different variables within certain constraints.

Monthly Profit

The net income earned by a business or individual during a one-month period, calculated by subtracting total expenses from total revenue.