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A firm is considering several policy changes to increase sales. It will increase the variety of gods it keeps in inventory, but this will increase inventory by $25,000. It will offer more liberal sales terms, but this will esult in average receivables increasing to $80,000. These actions are expected to increase sales to $950,000 per year, and cost of goods will remain at 70% of sales. Because of the firm's increased purchases for its own production needs, average payables will increase to $50,000. What effect will these changes have on the firm's cash conversion cycle?The cash conversion cyclewill increase or decrease by?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9947170

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