Which of the Following Would Increase a Firm's Cash Conversion

question 32

Multiple Choice

Which of the following would increase a firm's cash conversion cycle?

• A)Increase inventory days.
• B)Decrease accounts receivable days.
• C)Decrease accounts payable days.
• D)Increase cash days.

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Definitions:

Sales Price

The amount of money charged for a product or service in the market.

Current Profits

The amount of net income that a company has generated during the current fiscal period, reflecting its financial performance in the short term.

Production

The process of creating, manufacturing, or assembling goods and services.

Absorption Costing

A method of inventory costing that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed manufacturing overhead - in the cost of a product.