Which One of the Following Will Cause a Reduction in the NWC

question 87

Multiple Choice

Which one of the following will cause a reduction in the NWC turnover ratio all else held constant?

• A) a decrease in sales.
• B) an increase in average payables.
• C) an increase in average inventory.
• D) an increase in the average cash balance.

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Definitions:

Sales Performance

The measurement and evaluation of the sales activities and outcomes against the set goals or benchmarks.

Sales Quota

The minimum desired sales level for an individual or team for a specified period of time.

Specified Period

A specified period refers to a distinct, predefined duration of time during which certain activities are carried out or certain conditions apply, often detailed in contracts, plans, and schedules.

Incremental Productivity Method

A cost-based sales force sizing approach that compares the cost of adding one salesperson to expected additional sales revenue; the company will keep adding salespeople as long as the revenue exceeds the added cost.