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The Cash Conversion Cycle (CCC) Combines Three Factors: the Inventory

question 115

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The cash conversion cycle (CCC) combines three factors: The inventory conversion period, the average collection period, and the payables deferral period, and its purpose is to show how long a firm must finance its working capital.Other things held constant, the shorter the CCC, the more effective the firm's working capital management.

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Definitions:

Experimentation

A method of scientific investigation involving the manipulation and control of variables to establish cause-and-effect relationships.

Independent Variables

Variables in an experiment that are manipulated or changed by the researcher to determine their effects on dependent variables.

Dependent Variables

In experimental and statistical research, the variable being tested and measured, expected to change as a result of manipulations to the independent variable.

Deception

The act of misleading or falsely persuading others, often used in psychological experiments to maintain the integrity of the study.

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