A ﬁrm needs to raise cash and at the same time reduce the level of its accounts receivable. This ﬁrm would likely beneﬁt most by _______________________.

Question

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Factoring its receivables would allow the firm to sell its accounts receivable to a third party at a discount in exchange for immediate cash. This would not only provide cash to the firm but also reduce its accounts receivable level. The other options may provide cash but do not address the issue of reducing accounts receivable.

A ﬁRm Needs to Raise Cash and at the Same