2.Operating accruals are a spontaneous source of financing.

True

False

3.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.

4.Which of the following is likely to increase a company's liquidity?

repurchasing stock with cash on hand.

selling bonds and holding the proceeds as cash.

buying bonds with cash on hand.

increasing dividend payments to common shareholders.