One way to reduce a firm's cash conversion cycle would be to have as many customers as possible pay using credit rather than cash.

Question

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The cash conversion cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. Having customers pay with credit actually extends the time it takes to convert sales into cash, thus potentially increasing the cash conversion cycle, not reducing it. Reducing the cycle would involve faster conversion of inventory to sales and quicker collection of receivables, not extending payment terms for customers.

One Way to Reduce a Firm's Cash Conversion Cycle Would