Which of the Following Action Is Unlikely to Help a Business

question 3

Multiple Choice

Which of the following action is unlikely to help a business entity increase its cash flow from operations?

• A) Push sales at year-end by invoicing before shipment.
• B) Grow sales by courting marginal customers not serviced by any other firm.
• C) Structure credit terms for customers on the basis of the level of risk of default they represent.
• D) Reduce the diversity of suppliers to increase the entity's negotiation power with the remaining selected suppliers.

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Definitions:

Liquidated Damages

A contractual provision that specifies a predetermined amount of money that must be paid as damages in the event of a breach of contract.

Anticipatory Repudiation

A party's declaration to not fulfill their obligations under a contract before the performance is due.

Total Breach

A complete failure to perform or fulfill contractual obligations, resulting in the termination of the contract.

Implied Covenant

An obligation between parties that is not explicitly stated in a contract but is presumed to exist to facilitate the contract's purpose and ensure fairness.