Other Things Held Constant, Which of the Following Would Tend

question 74

Multiple Choice

Other things held constant, which of the following would tend to reduce the cash conversion cycle?

• A) Place larger orders for raw materials to take advantage of price breaks.
• B) Take all cash discounts that are offered.
• C) Continue to take all cash discounts that are offered and pay on the net date.
• D) Offer longer payment terms to customers.
• E) Carry a constant amount of receivables as sales decline.

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Definitions:

Supply and Demand

Economic model of price determination in a market that concludes that the price of a good is determined by its availability (supply) and the desires of those with purchasing power (demand).

Broadly Defined Good

Broadly defined goods encompass a range of products or services that cater to a wide variety of needs and preferences in the market.

Available Substitutes

Alternative products or services that consumers can use in place of another product or service.

Inelastic Portion

The segment of a demand curve where the quantity demanded changes very little with a change in price.