Other things held constant, which of the following would tend to reduce the cash
ID: 2667608 • Letter: O
Question
Other things held constant, which of the following would tend to reduce the cash conversion cycle?
1. Place larger orders for raw materials to take advantage of price breaks.
2. Carry a constant amount of receivables as sales decline.
3. Take all discounts that are offered.
4. Continue to take all discounts that are offered and pay on the net date.
5. Offer longer payment terms to customers.
Other things held constant, which of the following would tend to reduce the cash conversion cycle?
1. Place larger orders for raw materials to take advantage of price breaks.
2. Carry a constant amount of receivables as sales decline.
3. Take all discounts that are offered.
4. Continue to take all discounts that are offered and pay on the net date.
5. Offer longer payment terms to customers.
Explanation / Answer
Take all discounts that are offered.
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