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29. 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. Adopting a more liberal accounts receivable policy will tend to decrease the cash cycle.Difficulty level: MediumTopic: CASH CYCLEType: CONCEPTS26-45
Chapter 26 - Short-Term Finance and Planning30. Which of the following actions will tend to decrease the inventory period?I. discontinuing all slow-selling merchandiseII. selling obsolete inventory below cost just to get rid of itIII. buying raw materials only as they are needed in the manufacturing processIV. producing goods on demand versus for inventory Difficulty level: MediumTopic: INVENTORY PERIODType: CONCEPTS31. Which of the following actions will tend to decrease the accounts receivable period?I. loosening the standards for granting credit to customersII. increasing the discount for early payment by credit customersIII. increasing the finance charges applied to all customer balances outstanding over thirty daysIV. granting discounts for cash sales Difficulty level: MediumTopic: ACCOUNTS RECEIVABLE PERIODType: CONCEPTS26-46
Chapter 26 - Short-Term Finance and Planning32. An increase in which one of the following is most apt to be an indicator of an accounts receivable policy that is too restrictive? Difficulty level: EasyTopic: ACCOUNTS RECEIVABLE PERIODType: CONCEPTS33. If you delay paying your suppliers by an additional ten days, then: A. your payables turnover rate will increase.B.you will require less bank financing of your operations.C. the cash cycle will increase by ten days.D. your operating cycle will lengthen by ten days.E. your stock-out costs will rise.Difficulty level: MediumTopic: ACCOUNTS PAYABLE PERIODType: CONCEPTS