Provident Manufacturing recently began paying all of its invoices within 20 days of receipt, rather than its usual 30 days. How would this adjustment likely affect Provident's chances of receiving a bank loan in the near future? O Provident would be less likely to receive a loan, because this adjustment would reduce the firm's current liabilities to a lower level than most banks like to see. O Provident would be less likely to receive a loan, because this adjustment suggests the firm does not anticipate having enough money to pay its debts in the months to come. O Provident would be more likely to receive a loan, because this adjustment would maximize the firm's current liabilities while minimizing its use of long-term debt. O Provident would be more likely to receive a loan, because this adjustment would minimize the firm's current liabilities while also showing the firm's ability to promptly pay off short-term debts.

Provident Manufacturing recently began paying all of its invoices within 20 days of receipt, rather than its usual 30 days. How would this adjustment likely affect Provident's chances of receiving a bank loan in the near future? O Provident would be less likely to receive a loan, because this adjustment would reduce the firm's current liabilities to a lower level than most banks like to see. O Provident would be less likely to receive a loan, because this adjustment suggests the firm does not anticipate having enough money to pay its debts in the months to come. O Provident would be more likely to receive a loan, because this adjustment would maximize the firm's current liabilities while minimizing its use of long-term debt. O Provident would be more likely to receive a loan, because this adjustment would minimize the firm's current liabilities while also showing the firm's ability to promptly pay off short-term debts.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter17: The Management Of Cash And Marketable Securities

Section: Chapter Questions

Problem 2P

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Provident Manufacturing recently began paying all of its invoices within 20 days of receipt, rather than its usual 30 days. How would this adjustment likely affect Provident’s chances of receiving a bank loan in the near future?
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