1.The cash conversion cycle must be positive since it is measured in days. True...
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Accounting
1.The cash conversion cycle must be positive since it is measured in days.
True
False
2.Net working capital is best interpreted as a measure of solvency.
True
False
3.DEF Corp. believes its daily NPV will increase by $900 if it offers more lenient credit terms to its customers. DEF uses a 3% cost of capital for credit policy decisions. If the increased daily NPV continues indefinitely, what is the aggregate NPV of the decision to lower the company's credit standards? Assume a 365-day year.
24,200
11,315,000
30,000
10,950,000
4.Suppose that a company's days sales outstanding (DSO) increased from 85 days to 95 days. Which of the following will occur, all else being equal?
The company will appear to be more liquid as measured by its CCP.
The company will appear to be less liquid as measured by its CCP.
The company's CCP will remain unchanged.
Cannot be determined.
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