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Chapter 19: Quiz Problem 5
Fundamentals of Corporate Finance, 5e ISBN: 0073012386 Author: Richard A. Brealey

5. Managing Working Capital. A new computer system allows your firm to more accurately monitor inventory and anticipate future inventory shortfalls. As a result, the firm feels more able to pare down its inventory levels. What effect will the new system have on working capital and on the cash conversion cycle?

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The working capital will increase as less cash will be tied up ...

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