Cash conversion cycle can be reduced by reducing the payables deferral period which will slow down the payment to suppliers. Is it True or False?
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Cash conversion cycle can be reduced by reducing the payables deferral period which will slow down the payment to suppliers. Is it True or False?
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- Which of the following methods can NOT be used to improve the firm’s cash conversion cycle? Decrease the firm’s inventory conversion cycle. Decrease the firm’s receivables collection period. Decrease the firm’s payables deferral period. Increase the firm’s payables deferral period.In the case of decrease the operating cash cycle, which one of the following actions should be taken? A Delay payments to suppliers B Increase the inventory level while maintaining constant salesC Increase the period of time for which credit is granted to customers D Decrease the rate at which the average inventory is soldA. What is the incremental cash flows from switching credit policies? B. What is the cost of switching? C. What is your recommendation? D. What is the break-even sales increase? Interpret.
- The payback period method has been criticized for not taking the time value of money intoaccount. Could this limitation be overcome? If so, would this method then be preferable to theNPV method?Which of the following is correct with regards to cash discounts offering? a. It is used lengthen the cash conversion cycle without putting pressure the clients b. Investment in accounts receivable will likely grow since more customers will pay on a later date c. Bad debts expense will probably decrease since customers more likely take the advantage of discounts d. These are granted because customer acquires high quantity of products and goodsIf a floating-rate investor is low on cash, what is one way to buy a floor to ensure they receive some form of payment if rates drop?
- A decrease in the costs of using an ATM causes money demand to increase. Shifting the Money demand curve to the right.Group of answer choices A. The first statement is false. The second statement is true. B. The first and second statements are both false. C. The first statement is true. The second statement is false. D. The first and second statements are both true.Which of the following is correct with regards to cash discounts offering? Bad debts expense will probably decrease since customers more likely take the advantage of discounts It is used lengthen the cash conversion cycle without putting pressure the clients Investment in accounts receivable will likely grow since more customers will pay on a later date These are granted because customer acquires high quantity of products and goodsTwo firms- A and B- have same cash conversion cycle. But firm A have poor inventory conversion period but better fixed asset turnover than firm B. How you think firm A should do to reduce cash conversion cycle than firm B.
- Rate-based statistics (such as payback and discounted payback) represent summary cash flows, and these summaries tend to lose which two important details? O The investment size and the cash outflows that occur before the testing period O The investment size and the cash inflows that occur during the testing period O The investment size and the cash inflows that occur before the testing period O The investment size and cash inflows that occur after the rather arbitrary testing periodWhy is it important for a firm to minimize the length of its cash conversion cycle (CCC)? How can the firm minimize it? What are the strategies that the firm should consider while trying to minimize the CCC?. If the company reduces its DSO without seriouslyaffecting sales, what effect would this have onfree cash flow (1) in the short run and (2) in thelong run?
