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Which one of these statements is correct concerning the cash cycle? Increasing the accounts payable period increases the cash cycle. The cash cycle can exceed

Which one of these statements is correct concerning the cash cycle?

  • Increasing the accounts payable period increases the cash cycle.

  • The cash cycle can exceed the operating cycle if the payables period is equal to zero.

  • Adopting a more liberal accounts receivable policy will tend to decrease the cash cycle.

  • The longer the cash cycle, the more likely a firm will need external financing.

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

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