Which of the following actions could INCREASE a firm's working capital gap?
A)reduce the age of inventory
B)increase the age of accounts payable
C)increase the age of accounts receivable
D)All actions listed would increase a firm's working capital gap.

Question

Quizplus · Accepted Answer

Increasing the age of accounts receivable means that the firm is taking longer to collect payment from its customers, which in turn increases the amount of cash tied up in accounts receivable and widens the working capital gap. Reducing the age of inventory or increasing the age of accounts payable would have the opposite effect, and option D is incorrect because not all the actions listed would increase the working capital gap.

Which of the Following Actions Could INCREASE a Firm's Working