Which of the Following Statements Is False

question 32

Multiple Choice

Which of the following statements is false?

• A) The main components of net working capital are cash, inventory, receivables, and payables.
• B) The firm's cash cycle is the average length of time between when a firm originally purchases its inventory and when it receives the cash back from selling its product.
• C) Working capital includes the cash that is needed to run the firm on a day-to-day basis. It does not include excess cash, which is cash that is not required to run the business and can be invested at a market rate.
• D) If the firm pays cash for its inventory, the firm's operating cycle is identical to the firm's cash cycle.

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