Which of the Following Statements Is FALSE

question 69

Multiple Choice

Which of the following statements is FALSE?

• A)A firm's cash cycle is the length of time between when the firm pays cash to purchase its initial inventory and when it receives cash from the sale of the output produced from that inventory.
• B)Any reduction in working capital requirements generates a positive free cash flow that the firm can distribute immediately to shareholders.
• C)Most firms buy their inventory on credit, which increases the amount of time between the cash investment and the receipt of cash from that investment.
• D)The longer a firm's cash cycle, the more working capital it has, and the more cash it needs to carry to conduct its daily operations.

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Definitions:

Spillover Effect

The phenomenon where an occurrence in one context or part of life affects another context or part of life.

Physiological Arousal

Refers to the physical responses of the body, such as increases in heart rate or hormone levels, triggered by emotions, exercise, or stimuli that indicate the body's level of alertness and readiness to respond.

Epinephrine

A hormone and neurotransmitter also known as adrenaline, important for the body's fight-or-flight response.

Perspiration Levels

The amount or volume of sweat produced by the body, which can vary due to physical activity, emotional state, or environmental conditions.