Indicate the impact of the following on the cash and operating cycles, respectively. Use the letter I

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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 favourable.

(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 purchased on credit.

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

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Corporate Finance

ISBN: 9780077173630

3rd Edition

Authors: David Hillier, Stephen A. Ross, Randolph W. Westerfield, Bradford D. Jordan, Jeffrey F. Jaffe

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