A Firm Can Reduce Its Cash Conversion Cycle by

question 127

Multiple Choice

A firm can reduce its cash conversion cycle by

• A) increasing its average age of inventory
• B) increasing its average collection period
• C) decreasing its average payment period
• D) decreasing the number of customers buying on credit

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Definitions:

Perfect Competition

A market structure characterized by a large number of buyers and sellers, homogenous products, and the free entry and exit of firms, leading to price-taking behavior.

Market Price

The price at which a good or service is bought and sold in a marketplace, determined by the forces of supply and demand.

Perfect Competitors

Firms operating in a market where there are many sellers and buyers, products are homogenous, and there is free entry and exit from the market.

Short Run

A period in economics during which at least one input (like factory size) is fixed and cannot be changed, contrasting with the long run where all inputs can be varied.