The decisions that follow were made by the management of Cotton Gold Company.

Indicate whether each decision pertains primarily to

(a) cash flow management,

(b) profitability management,

(c) choice of inventory system, or

(d) control of merchandise operations.

1 . Decided to mark each item of inventory with a magnetic tag that sets off an alarm if the tag is removed from the store before being deactivated 2. Decided to reduce the credit terms offered to customers from 30 days to 20 days to speed up collection of accounts 3. Decided that the benefits of keeping track of each item of inventory as it is bought and sold would exceed the costs of such a system 4. Decided to raise the price of each item of inventory to achieve a higher gross margin to offset an increase in rent expense 5. Decided to purchase a new type of cash register that can be operated only by a per- son who knows a predetermined code 6. Decided to switch to a new cleaning service that will provide the same service at a lower cost. E-1