ABC Manufacturing historically produced products that were held in inventory until they could be sold to a customer.The firm is now changing its policy and only producing a product when they receive an actual order from a customer.All else equal,this change will:

Question

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By only producing products when they receive an actual order, ABC Manufacturing will decrease the time it takes to convert inventory into cash, thus decreasing the cash cycle. This change does not directly affect accounts payable, accounts receivable, or the inventory turnover rate, so options B, C, D, and E are incorrect.

ABC Manufacturing Historically Produced Products That Were Held in Inventory