If a Firm Decided to Speed Up Its Collection from Its

question 15

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) unable to determine from the information provided.

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Definitions:

Court

A governmental institution authorized to resolve legal disputes between parties and carry out the administration of justice in civil, criminal, and administrative matters.

Reasonable Time

A legal concept indicating the period within which actions must be taken or conditions fulfilled, considered fair and appropriate under the circumstances.

Fraudulent Misrepresentation

This is a false statement of fact made deceitfully to induce another party to enter into a contract, resulting in harm or loss.

Consequential Damages

Losses that do not flow directly and immediately from an act but only from some of the consequences or results of the act.