Which of the Following Will Increase the Operating Cycle

question 83

Multiple Choice

Which of the following will increase the operating cycle?

• A)The cash cycle decreases by one day but the average payment period increases by two and a half days.
• B)The days' sales in inventory decreases by one day but the average collection period increases by two days.
• C)COGS stays the same but inventory increases.
• D)All of the options will increase the operating cycle.

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Definitions:

Prescriptive Norms

Social rules that dictate what behavior is expected or appropriate within a community or society.

Proscriptive Norms

Social rules that dictate what behaviors are forbidden or discouraged within a society or group.

Ethnomethodology

A sociological approach that studies the way people make sense of their everyday world, emphasizing the methods and practices individuals use to constitute their social realities.

Rational Choice Theory

A framework for understanding and modeling social and economic behavior based on the assumption that individuals act rationally, making decisions to maximize their personal benefit.