Which of the following would be a step towards increasing cash flow and attempting to keep a business from becoming insolvent?
A) Try to maximize the accounts receivable.
B) Increase the amount of credit that you extend to customers.
C) Sell your receivables to companies that purchase accounts receivable at a discount in return for immediate cash.
D) Increase the raw material and finished products inventory that you hold.
E) All of the above.

Question

Quizplus · Accepted Answer

Option A and B may increase accounts receivable and sales, but there is no guarantee they will result in quicker cash flow. Option D could lead to increased expenses and the risk of obsolete inventory. Option C, selling receivables at a discount, is a known way to quickly generate cash flow without increasing debt.

Which of the Following Would Be a Step Towards Increasing