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.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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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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