Increases to cash flows can be anticipated if which of the following occurs?
A)A receivables contract is denominated in an appreciating foreign currency.
B)Sales are less than anticipated.
C)Days in accounts receivable increase by 15 days.
D)None of the above.

Question

Quizplus · Accepted Answer

If a receivables contract is denominated in an appreciating foreign currency, it means that the company will receive more dollars for the same amount of foreign currency over time. This will increase the company's cash inflows, leading to an increase in cash flows. Option B is incorrect because if sales are less than anticipated, it will lead to a decrease in cash flows. Option C is also incorrect because if days in accounts receivable increase, it means that customers are taking longer to pay their bills, which may lead to a decrease in cash flows.

Increases to Cash Flows Can Be Anticipated If Which of the Following