Which One of the Following Will Increase the Cash Cycle

question 57

Multiple Choice

Which one of the following will increase the cash cycle?

• A) Improving the cash discounts given to customers who pay their accounts early
• B) Having a larger percentage of customers paying with cash instead of credit
• C) Buying less raw materials to have on hand
• D) Paying your suppliers earlier to receive the discount they offer
• E) Ordering raw materials inventory only when you need it

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Definitions:

Break-even Points

The level of sales at which total revenues equal total costs, resulting in no profit and no loss.

Fixed Expenses

Fixed costs are those that stay the same no matter how much is produced or sold, covering expenses like rental fees, employee salaries, and insurance premiums.

Break-even Sales

The amount of revenue from sales at which a business neither makes a profit nor incurs a loss.

Fixed Expenses

Fixed expenses are costs that do not vary with the level of production or sales, providing stability to a company's budget, such as rent or insurance.