Asked by Eugene Dioso on May 16, 2024

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An increase in which one of the following will decrease the cash cycle, all else equal?

A) Payables turnover.
B) Day's sales in inventory.
C) Operating cycle.
D) inventory turnover rate
E) accounts receivable period

Operating Cycle

The period it takes for a business to purchase inventory, sell products, and convert the sales back into cash, essentially measuring the time span from buying raw materials to receiving cash from sales.

Inventory Turnover Rate

A measure of how quickly a company sells and replaces its stock of goods within a given period, indicating the efficiency of its inventory management.

  • Acquire knowledge about the determinants of the cash cycle and the effects of policy adjustments on the financial success of a firm.
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FS
Fernando SantosMay 20, 2024
Final Answer :
D
Explanation :
An increase in the inventory turnover rate decreases the cash cycle by reducing the amount of time inventory is held before it is sold, thereby speeding up the conversion of inventory into cash.