Extending Payment Beyond the Due Date in Order to Reduce

question 49

Multiple Choice

Extending payment beyond the due date in order to reduce the cash conversion cycle

• A) is an accepted "stretching" of credit terms.
• B) is an unethical cash management practice.
• C) is an unethical cash management practice,but can be viewed as acceptable.
• D) is backwards; this actually increases the cash conversion cycle.

---

Definitions:

Cartels

An association of independent firms or countries that agree to coordinate their production and pricing decisions to monopolize a market and maximize collective profits.

Collusive Agreement

A secret or illegal cooperation or conspiracy, especially between competitors, aimed at deceiving or gaining an unfair advantage in the market.

Dominant Firm

A company that has a major share of the market for a particular product or service, often able to influence market conditions.

Competitive Fringe

Small, less dominant firms in a market that compete at the periphery with the larger dominant firms, often by focusing on niche segments.