answers in the Following tatde 18 1. Other things held constant, which of the following will cause an increase in net working capital? a. Cash is used to buy marketable securities. b. A cash dividend is declared and paid. c. Merchandise is sold at a profit, but the sale is on credit. d. Long-term bonds are retired with the proceeds of a preferred stock issue. e. Missing inventory is written off against retained earnings. 2. Firms generally choose to finance temporary current assets with short-term debt because a. matching the maturities of assets and liabilities reduces risk under some circumstances, and also because c. a firm that borrows heavily on a long-term basis is more apt to be unable to repay the debt than a firm b. d. the yield curve is normally downward sloping. e. short-term debt has a higher cost than equity capital. short-term debt is often less expensive than long-term capital. short-term interest rates have traditionally been more stable than long-term interest rates. that borrows short term. Helena Furnishings wants to reduce its cash conversion cycle. Which of the following actions should it tak . Increases average inventory without increasing sales. Take steps to reduce the days sales outstanding. Start paying its bills sooner, which would reduce the average accounts payable but not affect sales Sell common stock to retire long-term bonds. Sell an issue of long-term bonds and use the proceeds to buy back some of its common stock