Adv. Corp Finance 2

4. A company increasing its credit terms for customers from 1/10, net 30 to 1/10, net 60 will most likely experience: (1) a. an increase in cash on hand b. a higher level of uncollectible accounts. c. an increase in the average collection period d. a reduction in sales 5. Which of the following actions should a company take if it wants to reduce its cash conversion cycle? (1) a. Take steps to reduce the receivables. b. Start paying its bills sooner, which would reduce the average accounts payable but not affect sales. c. Sell common stock to retire long-term bonds. d. Increase average inventory without increasing sales