Question regarding the cash conversion cycle


Other things held constant, which of the following would tend to reduce the cash conversion cycle?

1. Carry a constant amount of receivables as sales decline.

2. Place larger orders for raw materials to take advantage of price breaks.

3. Take all discounts that are offered.

4. Continue to take all discounts that are offered and pay on the net date.

5. Offer longer payment terms to customers.

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