Cash Conversion Cycle. Will each of the following events increase or decrease cash conversion cycles? (LO2) A-Higher financing rates induce the firm to reduce its level of inventory. b. The firm obtains a new line of credit that enables it to avoid stretching payables to its suppliers. c-The firm factors its trade receivables. d-A recession occurs and the firm's customers increasingly stretch their payables. e. The new production process shortens the time needed to manufacture products.
Cash Conversion Cycle. Will each of the following events increase or decrease cash conversion cycles? (LO2) A-Higher financing rates induce the firm to reduce its level of inventory. b. The firm obtains a new line of credit that enables it to avoid stretching payables to its suppliers. c-The firm factors its trade receivables. d-A recession occurs and the firm's customers increasingly stretch their payables. e. The new production process shortens the time needed to manufacture products.
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter21: Supply Chains And Working Capital Management
Section: Chapter Questions
Problem 8MC
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Cash Conversion Cycle. Will each of the following
events increase or decrease cash conversion cycles?
(LO2)
A-Higher financing rates induce the firm to reduce
its level of inventory.
b.
The firm obtains a new line of credit that enables
it to avoid stretching payables to its suppliers.
c-The firm factors its trade receivables.
d-A recession occurs and
the firm's customers
increasingly stretch their payables.
e.
The new production process shortens the time
needed to manufacture products.
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