If a Firm Decided to Speed Up Its Collection from Its

question 137

Multiple Choice

If a firm decided to speed up its collection from its customers by reducing the receivables period and kept the inventory period and payable period the same, then:

• A)Cash conversion cycle will increase
• B)Cash conversion cycle will decrease
• C)The firm's investment in working capital will be minimized
• D)Investment in working capital will be maximized

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Definitions:

Peter Blau's Exchange Theory

A sociological perspective that views social interactions as transactions in which individuals seek to maximize their rewards and minimize their costs.

Legitimization

The process of making something acceptable, justified, or seen as legitimate, often in a social, legal, or moral sense.

Power Differentials

The disparities in power between individuals or groups in a social hierarchy or structure.

Social Interaction

The process by which people act and react in relation to others, forming the basis of social relationships and structures.