Which of the Following Statements Is False

question 4

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.

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Definitions:

Celebrating Success

The act of acknowledging and rejoicing over accomplishments or milestones, which can boost morale and foster unity within a team or organization.

Hawthorne Studies

A series of experiments conducted in the 1920s and 1930s that studied the effects of changes in the work environment on employee productivity, laying the groundwork for modern human resources management.

Massive Industrialization

The rapid and extensive growth and development of industry and manufacturing capabilities within a region or country.

Worker's Productivity

A measure of the efficiency of a worker, calculated by the output produced over a defined period of time relative to the input used.