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      Question

      A firm has high current assets turnover but declining

      sales. What strategy should it follow?
      A Increase working capital Correct Answer Incorrect Answer
      B Maintain current ratio Correct Answer Incorrect Answer
      C Tighten receivables and inventory Correct Answer Incorrect Answer
      D Increase trade credit Correct Answer Incorrect Answer

      Solution

      Declining sales with high current asset turnover indicates over-investment. Streamlining receivables and inventory helps improve efficiency.

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