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Indicate the effect that the following will have on the operating cycle. I = indicate an increase and D = a decrease or N =
Indicate the effect that the following will have on the operating cycle. I = indicate an increase and D = a decrease or N = no change.
Average receivables goes up
Credit repayment times for customers are increased
Inventory turnover goes down 3 times to 6 times
Payables turnover goes from 6 times to 11 times
Receivables turnover goes from 7 times to 9 times
Payments to suppliers are accelerated
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