Which of the following factors affect the firm's level of investment in working capital?
A) the length of the firm's operating cycle
B) the firm's sales level
C) the firm's inventory and credit policies
D) All of these choices are correct.

Question

Quizplus · Accepted Answer

All of the choices listed, including the length of the firm's operating cycle, the firm's sales level, and the firm's inventory and credit policies, can impact the firm's investment in working capital. The length of the operating cycle can affect the amount of cash required for day-to-day operations, while sales levels may impact inventory and receivables. Inventory and credit policies can also impact the amount of working capital needed to run the business efficiently.

Which of the Following Factors Affect the Firm's Level of Investment