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A Company Wishes to Reduce the Amount of Working Capital

question 28

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A company wishes to reduce the amount of working capital it requires to finance its operations. Which of the following would be the least effective way of reducing working capital requirements?


Definitions:

Free-Market System

An economic system based on supply and demand with little or no government control.

Quantity Adjustments

Changes made in the quantity of goods produced or procured in response to shifts in demand or supply.

Laissez-Faire Economy

An economic system where private parties are free from government intervention, such as regulations, privileges, tariffs, and subsidies.

Central Government Authority

The part of the government that has a national mandate and is responsible for the implementation and administration of policy and law in a country.

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