Working capiral, the current assets and liabilities of the firm, is often considered something of a necessary evil of conducting business. Bur many management strategies today focus on minimizing the amount of capital that is tied up in working capital and encouraging firms to minimize inventories, reduce receivables, and at the same time utilize extended payment terms at every opportunity:

a. What are the pros and cons of instituting a financial management system in which working capital is intentionally downsized:

b. If the firm were exporting products to buyers in many different countries, countries in which standard business practices include extensive credit terms, how would these sales be financed: At what potential cost: