Q1.Firm should always give up discounts and defer payments as long as possible.

True

False

Q2.When a firm sells goods to a customer on credit, an account payable is created.

True

False

Q3.The larger cash conversion cycle means company will receive more cash.

True

False

Q4.Lowering the target cash balance can lead to firm running out of cash.

True

False

Q5.Indicate the effect of the following on the cash conversion cycle: Accounts payable period goes up

No change

Increase

Decrease