Other Things Held Constant,which of the Following Would Tend to Reduce

question 108

Multiple Choice

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

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

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Definitions:

Cash Outflow

Money or value leaving a business, typically through expenses, purchases, or other financial activities.

Selling Equipment

The process of disposing of company-owned machinery or equipment, usually to generate cash or reduce assets.

Book Value

Cost of equipment less accumulated depreciation.

Loss

The result when a company's expenses exceed its revenues during a specific period, indicating a decrease in net assets.