Which of the Following Actions Would Be Likely to Shorten

question 62

Multiple Choice

Which of the following actions would be likely to shorten the cash conversion cycle?

• A) Adopt a new manufacturing process that speeds up the conversion of raw materials to finished goods from 20 days to 10 days.
• B) Change the credit terms offered to customers from 3/10,net 30 to 1/10,net 50.
• C) Begin to take discounts on inventory purchases;we buy on terms of 2/10,net 30.
• D) Adopt a new manufacturing process that saves some labor costs but slows down the conversion of raw materials to finished goods from 10 days to 20 days.
• E) Change the credit terms offered to customers from 2/10,net 30 to 1/10,net 60.

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Definitions:

Third-Party Firms

External companies or organizations that are not directly involved in a transaction but may provide auxiliary services.

Virtuous Qualities

pertains to moral excellence and righteousness, often considered desirable traits in individuals.

Positive Institutions

Organizations or structures in society that promote individual well-being, positive psychology, and the development of strengths and virtues.

Positive Affect

A dimension of emotional experience that reflects the extent to which an individual feels enthusiastic, active, and alert.