Gupta Corporation Has Forecasted Its Need for External Funding in the Following

Gupta Corporation has forecasted its need for external funding in the following year. It needs to raise $2M in either debt or equity. It would like to minimize its need for external funding without decreasing its projected growth. Which of the following would reduce its need for additional funding?

A) An increase in the dividend payout ratio
B) An increase in days sales outstanding
C) An increase in accounts payable
D) A decrease in inventory turnover

Correct Answer:

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