If a Firm Wants to Decrease Its Cash Conversion Cycle

question 18

Multiple Choice

If a firm wants to decrease its cash conversion cycle, which of the following actions should it take? Assume everything else is equal. 

• A)Loosen credit terms to increase the firm's sales.
• B)Delay payments made to suppliers so that the firm pays late.
• C)Purchase more raw materials to increase the average inventory the firm maintains.
• D)Increase the amount the firm borrows from its bank.
• E)Decrease the common equity on the firm's balance sheet.

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