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Why does a decrease in NWC result in a cash inflow to the firm? Is it possible for a firm to have negative net working

  1. Why does a decrease in NWC result in a cash inflow to the firm?
  2. Is it possible for a firm to have negative net working capital? If so, how?
  3. Would it be possible for a firm to have a negative cash cycle? If so, how?
  4. What purpose does a discount on credit terms serve? What is the cost of such a discount to the offering firm?

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