An Effective Program of Working Capital Management Requires That

question 244

Multiple Choice

An effective program of working capital management requires that:

• A)the firm run with the absolute minimum in each current asset account.
• B)a series of cost/benefit tradeoffs be considered because running a business is easier with more working capital than with less, but holding working capital costs money.
• C)large inventories be maintained to adequately service customers.
• D)credit can be easily granted to customers to encourage higher sales.

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Definitions:

Competitive Advantage

The attributes that allow an organization to outperform its competitors.

Customer Services

Activities and support provided by a business to its customers before, during, and after a purchase to enhance satisfaction.

Lower Costs

The reduction of expenses associated with producing or offering goods and services, aiming to improve efficiency and profitability.

Image Building

The strategic process of creating, improving, or maintaining a positive public perception of a company, brand, or individual.