Which one of these statements is correct? Assume all else held constant.

Multiple Choice

• A decrease in the accounts receivable turnover rate decreases the cash cycle.

• The cash cycle is equal to the operating cycle minus the inventory period.

• A negative cash cycle is preferable to a positive cash cycle.

• A decrease in the accounts payable period shortens the cash cycle.

• The cash cycle plus the accounts receivable period is equal to the operating cycle.