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Which one of the following will decrease the liquidity level of a firm? A. Cash purchase of inventory B. Credit sale of inventory C. Cash

Which one of the following will decrease the liquidity level of a firm?

A. Cash purchase of inventory

B. Credit sale of inventory

C. Cash sale of inventory

D. Collection of an account receivable

E. Proceeds from a long-term loan

Please show me the explanation with correct answer, thank you.

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