Which One of the Following Statements Is Correct Concerning the Cash

question 20

Multiple Choice

Which one of the following statements is correct concerning the cash cycle?

• A)The longer the cash cycle, the more likely a firm will need external financing.
• B)Increasing the accounts payable period increases the cash cycle.
• C)A positive cash cycle is preferable to a negative cash cycle.
• D)The cash cycle can exceed the operating cycle if the payables period is equal to zero.
• E)Offering early payment discounts to customers will tend to increase the cash cycle.

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Definitions:

Scatter Diagram

A graphical representation used to visualize the relationship between two quantitative variables, showing how one variable affects the other.