Answered: How does the uncertain nature of a…

How does the uncertain nature of a firm’s sales due to COVID-19 influence its decision regarding the amount of short-term credit to use in its financing strategy?

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter22: Providing And Obtaining Credit

Section: Chapter Questions

Problem 10MC

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Conversion Cycle

Conversion cycle is also known as cash cycle or net operating cycle. Conversion cycle refers to how much time a company takes to turn its investments which is done from stock or any other financial resources into cash flows from sales.

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Liquidity risk is a. The risk of doing business in a particular industry or environment b. The uncertainty about the time element, the price concession , and the conversion to cash c. The risk if loss due to import and export dominated in other currencies d. The risk associated with the use of debt financing by companies. **************************** correct answer please&***************
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