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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
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 it receives an actual order from a customer. All else equal, this change will:Increase the operating cycle. Lengthen the accounts receivable period. Shorten the accounts payable period. Decrease the cash cycle. Decrease the inventory turnover rate.
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