Other things held constant,which of the following alternatives would increase a company's cash flow for the current year?
A)Pay down the accounts payables.
B)Reduce the days' sales outstanding (DSO) without affecting sales or operating costs.
C)Pay workers more frequently to decrease the accrued wages balance.
D)Reduce the inventory turnover ratio without affecting sales or operating costs.

Question

Quizplus · Accepted Answer

Reducing the days' sales outstanding (DSO) without affecting sales or operating costs would increase the speed of cash collections and result in a higher cash balance for the current year. Option A would reduce cash by paying down accounts payable, option C would result in increased cash outflows by paying workers more frequently, and option D would increase tied-up cash in inventory, reducing cash flow.

Other Things Held Constant,which of the Following Alternatives Would Increase