Question

Q1.Firm should always give up discounts and defer payments as long as possible. 

True

False

Q2.When a firm sells goods to a customer on credit, an account payable is created. 

True

False

Q3.The larger cash conversion cycle means company will receive more cash. 

True

False

Q4.Lowering the target cash balance can lead to firm running out of cash. 

True

False

Q5.Indicate the effect of the following on the cash conversion cycle: Accounts payable period goes up

No change

Increase

Decrease

Answer 1

Hello Sir/ Mam

Q - 1 - FALSE

Firm should take up the cost anaysis aand analyse both the options and should undertake the cheapest.

Q2. FALSE

When a firm sells goods to a customer on credit, an account receivable is created.

Q3. FALSE

The larger cash conversion cycle means the company is taking a huge time to convert the inputs into cash.

Q4.TRUE

Q5. Accounts payable period goes up leading to decrease in CCC.

I hope this solves your doubt.

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