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

question 79

Multiple Choice

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

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

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Definitions:

Marginal Revenue

The additional revenue that a company generates by selling one more unit of a product.

Simulation Analysis

A method used in financial planning that assesses the impact of different variables on a model's outcome to predict possible outcomes under different scenarios.

Range of Values

A set of values that includes the minimum and maximum values within a given dataset.

Cash Basis

An accounting method where revenues and expenses are recorded when they are actually received or paid out in cash.