When a Firm Improves (Lowers)its Average Collection Period, It Generally

question 5

Multiple Choice

When a firm improves (lowers) its average collection period, it generally

• A)requires additional cash investment in inventory.
• B)releases cash locked up in accounts receivable.
• C)does not alter its cash position.
• D)cannot reduce its receivables.

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Definitions:

Obsolescence

The process of becoming outdated or no longer used, often due to technological advancements.