Problem

Changes in Cycles. Indicate the impact of the following on the cash and operating cycles,...

Changes in Cycles. Indicate the impact of the following on the cash and operating cycles, respectively. Use the letter I to indicate an increase, the letter D for a decrease, and the letter N for no change.

a. The terms of cash discounts offered to customers are made less favorable.


b. The cash discounts offered by suppliers are increased; thus, payments are made earlier.


c. An increased number of customers begin to pay in cash instead of with credit.


d. Fewer raw materials than usual are purchased.


e. A greater percentage of raw material purchases are paid for with credit.


f. More finished goods are produced for inventory instead of for order.

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Solutions For Problems in Chapter 16