Question: 1. Why does a decrease in NWC result in a cash inflow to the firm? 2. Is it possible for a firm to have negative

1. Why does a decrease in NWC result in a cash inflow to the firm?

2. Is it possible for a firm to have negative net working capital? If so, how?

3. Would it be possible for a firm to have a negative cash cycle? If so, how?

4. What purpose does a discount on credit terms serve? What is the cost of such a discount to the offering firm?

Please answer all of the questions, if you can not answer all of the questions do not reply.

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