Which of the Following Actions Would Likely Shorten the Length

question 53

Multiple Choice

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

• A) adopting a new inventory system that reduces the inventory conversion period
• B) reducing the average DSO on its accounts receivable
• C) reducing the amount of time the company takes to pay its suppliers
• D) both a and b

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Definitions:

Nominal Return

The return on an investment without adjusting for inflation, representing the raw earnings or loss.

Inflation

The rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling.

Indifference Curve

A graph showing different combinations of two goods that provide equal satisfaction or utility to a consumer.

Budget Line

A graphical representation of all possible combinations of two goods that can be purchased with a given budget at specific prices.