Other Things Held Constant, Which of the Following Alternatives Would

question 46

Multiple Choice

Other things held constant, which of the following alternatives would increase a company's cash flow for the current year?

• A)Increase the number of years over which fixed assets are depreciated for tax purposes.
• B)Pay down the accounts payables.
• C)Reduce the days' sales outstanding (DSO)without affecting sales or operating costs.
• D)Pay workers more frequently to decrease the accrued wages balance.
• E)Reduce the inventory turnover ratio without affecting sales or operating costs.

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Definitions:

Machine Hours

A measure of production time, quantifying the total hours a machine is operated within a specific period.

Overhead Absorption Rate

The method of allocating overhead costs to specific units of production, based on certain criteria like direct labor hours or machine hours.

Direct Labor Hours

The cumulative number of hours put in by workers who are directly engaged in the production process.

Dual Rate System

A method of cost allocation where costs are divided into fixed and variable categories, with each being allocated differently.