Which of the Following Actions Would Be Likely to Shorten

question 18

Multiple Choice

Which of the following actions would be likely to shorten the cash conversion cycle?

• A) Change the credit terms offered to customers from 3/10 net 30 to 1/10 net 50.
• B) Begin to take discounts on inventory purchases; we buy on terms of 2/10 net 30.
• C) Adopt a new manufacturing process that saves some labor costs but slows down the conversion of raw materials to finished goods from 10 days to 20 days.
• D) Change the credit terms offered to customers from 2/10 net 30 to 1/10 net 60.
• E) Adopt a new manufacturing process that speeds up the conversion of raw materials to finished goods from 20 days to 10 days.

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Definitions:

Piedmont Glacier

A broad glacier that forms when an ice sheet or valley glacier spreads out as it moves into less confined topography.

Continental Ice Sheet

A large mass of ice, including glaciers, that covers a large part of a continent.

Shoreline Glacier

A glacier that extends to the sea at its terminus, often calving icebergs into the water.

Glaciers

Large, slow-moving masses of ice that form from the accumulation and compaction of snow on mountains or near the poles.