Which Statement Is True

Which statement is true?

A) The inventory period increases as the inventory turnover rate increases.
B) The length of the inventory period depends on the length of the cash cycle.
C) The inventory period is the average number of days a firm holds inventory on its shelves.
D) The inventory period is equal to the operating cycle minus the accounts payable period.
E) The inventory period has no effect on the cash cycle.

Correct Answer:

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