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.

---

Definitions:

Mixed Cost

A cost that contains both variable and fixed cost elements, changing in total with the level of activity but having a portion that remains constant.

Variable Cost

Costs that vary directly with the level of production or service activity.

Fixed Cost

Expenses that do not change with the level of production or sales over the short term, such as rent, salaries, and insurance.

Period Cost

An expense that is not directly tied to the production process but rather incurred over a specific time period.