If a Firm Decided to Reduce the Receivables Period by Speeding

question 60

Multiple Choice

If a firm decided to reduce the receivables period by speeding up its collections from its customers while keeping the inventory period and payables period the same, then the:

• A) cash conversion cycle will increase.
• B) cash conversion cycle will decrease.
• C) firm's investment in working capital will be minimized.
• D)cash conversion cycle will increase while net working capital decreases.

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Definitions:

Major Organic Product

The primary product formed in the highest yield during an organic chemical reaction.

Aldol Product

The compound resulting from an aldol reaction, which involves the coupling of an aldehyde or ketone with a carbon nucleophile followed by dehydration to give a β-hydroxyaldehyde or β-hydroxyketone.

Aldol Condensation

A chemical reaction that combines two aldehyde or ketone molecules, with the loss of water, to form a larger β-hydroxy aldehyde or ketone.

Synthesis

A process where complex compounds are formed from simpler substances through a series of chemical reactions.