The Difference Between a Firm's Operating Cycle and Its Cash

question 11

Multiple Choice

The difference between a firm's operating cycle and its cash cycle is ________.

• A) its account receivable days
• B) its accounts payable days
• C) its inventory days
• D) There is no difference between the cash and operating cycles.

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Definitions:

Percentage Change

Percentage Change is a mathematical calculation that shows how much a quantity has increased or decreased as a percentage of its previous amount.

Incomes

Periodic earnings obtained from professional activities or financial investments.

Services

Economic activities that produce intangible goods, such as entertainment, healthcare, and education.

MPC

A measure of the rate at which consumers are likely to spend additional income, rather than save it.