Question
The executives at the firm are having a meeting to determine how to best manage an expected cash shortfall. Your colleague states: There are several
The executives at the firm are having a meeting to determine how to best manage an expected cash shortfall. Your colleague states: "There are several ways we can raise cash without going to external sources. First, we could reduce our accounts payable period by delaying payments to our suppliers. Second, we could reduce our accounts receivables period by collecting payments on sales sooner. Third, we could reduce our expected dividend payout ratio and generate additional internal funding through retained earnings."
Which of the above statements is incorrect?
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