Sophia Principles of Finance Unit 4 Challenge 3

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1 — Working Capital What can a business that has too much working capital do to reduce it? Relax its customer credit policy 2 — Working Capital Financing Which of the following is a goal o... f working capital management? To meet day to day expenses while minimizing the cost of holding cash 3 — Cash Conversion Cycle A company has a 120-day operating cycle with 80 inventory days, 40 receivable days and 15 payable days. What is their cash conversion cycle? 105 4 — Cash Management When managing its cash, a company can make use of float to __________. hold on to cash for as long as possible 5 — Securities Management In what way are debt securities, equity securities and derivatives similar? They can all be converted to cash with little difficulty. 6 — Accounts Receivable Place the following steps for developing a credit policy in the correct order of process: A: The company decides that it wants to prioritize a large volume of sales, even if it means accepting more bad debt B: The company decides that if a customer fails to pay, they will not pursue legal action. C: The company decides that it's willing to offer payment terms of 3/10, Net 30. A, C, B [Show More]

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