Question

Which of the following statements are CORRECT?

If a firm takes actions that increase its days sales outstanding (DSO), then, other things held constant, this will shorten its cash conversion cycle (CCC).

Other things held constant, if a firm "stretches" (i.e., delays paying) its accounts payable, this will lengthen its CCC.

Other things held constant, adopting a new manufacturing process that speeds up the conversion of raw materials to finished goods from 20 days to 10 days will lengthen the CCC.

Other things held constant, if a firm changes the credit terms offered to customers from 3/10 net 30 to 1/10 net 50, this will lengthen the CCC.

If a firm takes actions that decrease its inventory conversion period (ICP), then, other things held constant, this will lenghthen its cash conversion cycle (CCC).

Answer 1