Which of the Following Is a Firm's Cash Cycle

question 27

Multiple Choice

Which of the following is a firm's cash cycle?

• A)the average length of time between when a firm originally purchases its inventory and when it receives the cash back from selling its product
• B)the average length of time between when a firm pays cash to purchase its initial inventory and when it receives cash from the sale of the product produced from that inventory
• C)the average length of time between when a firm pays cash to purchase its initial inventory and when it sells that product
• D)the average length of time between when a firm originally purchases its inventory and when it sells the product produced from that inventory

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Definitions:

Fair Value Adjustment

A correction made to the reported value of an asset or liability to align it with its market value.

Discounted Note

A debt instrument that is sold or issued for less than its face value and whose return comes from the difference between the purchase price and the face value paid at maturity.

Proceeds

The amount of money received from a transaction, often used in the context of sales or the disposition of assets.

Debt Restructure

The process of renegotiating the terms of existing debt agreements to provide a more favorable outcome for the borrower, potentially including changes to interest rates, repayment schedules, or the amount owed.