Which Statement Is True

Which statement is true?

A) A decrease in the accounts receivable turnover rate decreases the cash cycle.
B) Paying a supplier within the discount period rather than waiting until the end of the normal credit period will decrease the cash cycle.
C) The number of days in the cash cycle can be positive, negative, or equal to zero.
D) An increase in the inventory turnover rate must increase the cash cycle.
E) The payables period must be shorter than the receivables period.

Correct Answer:

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