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 trade payabless 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 trade receivables policy will tend to decrease the cash cycle.
Correct Answer:
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