Question

The operating cycle of a merchandising company is:

Select one:
a. ordinarily shorter than that of a service company.
b. always one year in length.
c. about the same as that of a service company.
d. ordinarily longer than that of a service company.

Answer 1

The operating cycle of a merchandising company is ordinarily longer than that of a service company due to the need to manage inventory.

Step-by-step explanation:

The operating cycle of a merchandising company is typically ordinarily longer than that of a service company. This is because merchandising companies have to manage inventory which involves purchasing, holding, and selling goods, which extends the cycle.

Meanwhile, service companies often do not have tangible inventory and can operate with shorter cycle times. However, operation cycles can be influenced by various factors and are not always consistent across industries.