A Firm Wants to Reduce Its Cash Cycle

question 31

Multiple Choice

A firm wants to reduce its cash cycle. Which of the following actions will reduce its cash cycle?

• A)The firm reduces its DSO.
• B)The firm increases its inventory.
• C)The firm reduces its accounts payable.
• D)All of the options are actions that will reduce its cash cycle.

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Definitions:

Creative Destruction

A concept in economics which suggests that new innovations destroy old industries and methods, leading to new sectors and opportunities for growth.

Start-Up Firms

Newly established businesses often characterized by innovation, growth potential, and a scalable business model.

Dominant Firms

Are companies that have a major share of the market sales, setting them apart from their competitors.

Creative Destruction

A concept in economics introduced by Joseph Schumpeter, referring to the process in which technological progress and innovation lead to the demise of outdated industries and economic structures, making way for new ones.