Assume that you are running a small business and you estimate that you will run out of cash in two months. Which of the following could you do to avoid running out of cash?
A) Arrange to pay accounts payable later.
B) Offer customers a discount for paying more quickly.
C) Reduce raw materials.
D) All of these will help to increase cash available.
E) None of these (a, b, or c) will help to increase cash.

Question

Quizplus · Accepted Answer

All of these options (arranging to pay accounts payable later, offering customers a discount for paying more quickly, and reducing raw materials) will help to increase cash available. By paying accounts payable later, you are able to hold onto your cash for longer, while offering customers a discount for paying more quickly will encourage them to pay faster, bringing in more cash sooner. Reducing raw materials or finding ways to cut costs can also help to increase cash available. By combining these strategies, you may be able to extend your cash runway and avoid running out of cash in two months.

Assume That You Are Running a Small Business and You