Whether it is possible that the firm’s cash cycle be longer than operating cycle. Operating Cycle: Operating cycle is a time period between the sale of product and the recovery of cash from the customer. Operating cycle is also known as the business cycle, it involves every quantitative business activity of the company. Cash Cycle: The time period between the payment of cash to the supplier for the purchase of raw material and the receipt of cash from the customer for the sale of product is known as cash cycle of a business. If the cash cycle is shorter the amount of available cash is more and the company has no need to borrow cash from outsiders.

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Answer 1

Question

Chapter 26, Problem 5CQ

Summary Introduction

To explain: Whether it is possible that the firm’s cash cycle be longer than operating cycle.

Operating Cycle:

Operating cycle is a time period between the sale of product and the recovery of cash from the customer. Operating cycle is also known as the business cycle, it involves every quantitative business activity of the company.

Cash Cycle:

The time period between the payment of cash to the supplier for the purchase of raw material and the receipt of cash from the customer for the sale of product is known as cash cycle of a business. If the cash cycle is shorter the amount of available cash is more and the company has no need to borrow cash from outsiders.

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Answer 2

Question

Chapter 26, Problem 5CQ

Summary Introduction

To explain: Whether it is possible that the firm’s cash cycle be longer than operating cycle.

Operating Cycle:

Operating cycle is a time period between the sale of product and the recovery of cash from the customer. Operating cycle is also known as the business cycle, it involves every quantitative business activity of the company.

Cash Cycle:

The time period between the payment of cash to the supplier for the purchase of raw material and the receipt of cash from the customer for the sale of product is known as cash cycle of a business. If the cash cycle is shorter the amount of available cash is more and the company has no need to borrow cash from outsiders.

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Answer 3

Question

Chapter 26, Problem 5CQ

Summary Introduction

To explain: Whether it is possible that the firm’s cash cycle be longer than operating cycle.

Operating Cycle:

Operating cycle is a time period between the sale of product and the recovery of cash from the customer. Operating cycle is also known as the business cycle, it involves every quantitative business activity of the company.

Cash Cycle:

The time period between the payment of cash to the supplier for the purchase of raw material and the receipt of cash from the customer for the sale of product is known as cash cycle of a business. If the cash cycle is shorter the amount of available cash is more and the company has no need to borrow cash from outsiders.

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Answer 4

Question

Chapter 26, Problem 5CQ

Summary Introduction

To explain: Whether it is possible that the firm’s cash cycle be longer than operating cycle.

Operating Cycle:

Operating cycle is a time period between the sale of product and the recovery of cash from the customer. Operating cycle is also known as the business cycle, it involves every quantitative business activity of the company.

Cash Cycle:

The time period between the payment of cash to the supplier for the purchase of raw material and the receipt of cash from the customer for the sale of product is known as cash cycle of a business. If the cash cycle is shorter the amount of available cash is more and the company has no need to borrow cash from outsiders.

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Answer 5

Chapter 26, Problem 5CQ

Summary Introduction

To explain: Whether it is possible that the firm’s cash cycle be longer than operating cycle.

Operating Cycle:

Operating cycle is a time period between the sale of product and the recovery of cash from the customer. Operating cycle is also known as the business cycle, it involves every quantitative business activity of the company.

Cash Cycle:

The time period between the payment of cash to the supplier for the purchase of raw material and the receipt of cash from the customer for the sale of product is known as cash cycle of a business. If the cash cycle is shorter the amount of available cash is more and the company has no need to borrow cash from outsiders.

Answer 6

Chapter 26, Problem 5CQ

Summary Introduction

To explain: Whether it is possible that the firm’s cash cycle be longer than operating cycle.

Operating Cycle:

Operating cycle is a time period between the sale of product and the recovery of cash from the customer. Operating cycle is also known as the business cycle, it involves every quantitative business activity of the company.

Cash Cycle:

The time period between the payment of cash to the supplier for the purchase of raw material and the receipt of cash from the customer for the sale of product is known as cash cycle of a business. If the cash cycle is shorter the amount of available cash is more and the company has no need to borrow cash from outsiders.

Answer 7

Chapter 26, Problem 5CQ

Summary Introduction

To explain: Whether it is possible that the firm’s cash cycle be longer than operating cycle.

Operating Cycle:

Operating cycle is a time period between the sale of product and the recovery of cash from the customer. Operating cycle is also known as the business cycle, it involves every quantitative business activity of the company.

Cash Cycle:

The time period between the payment of cash to the supplier for the purchase of raw material and the receipt of cash from the customer for the sale of product is known as cash cycle of a business. If the cash cycle is shorter the amount of available cash is more and the company has no need to borrow cash from outsiders.

Answer 8

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Answer 9

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Answer 10

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Answer 11

Ch. 26 - Prob. 1CQ Ch. 26 - Prob. 2CQ Ch. 26 - Prob. 3CQ Ch. 26 - Cost of Current Assets Grohl Manufacturing, Inc.,...Ch. 26 - Prob. 5CQ Ch. 26 - Shortage Costs What are the costs of shortages?...Ch. 26 - Prob. 7CQ Ch. 26 - Prob. 8CQ Ch. 26 - Prob. 9CQ Ch. 26 - Prob. 10CQ

Solution Summary: The author explains that it is possible that the firm's cash cycle is longer than the operating cycle of a firm.

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Chapter 26 Solutions