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CIPS L4M2 Exam - Topic 3 Question 79 Discussion

Actual exam question for CIPS's L4M2 exam

Question #: 79
Topic #: 3

[All L4M2 Questions]

Which of the following would positively affect a buyer's company cash flow? Select TWO that apply.

AThe bank grants a loan to the buyer's company

BPayment of dividends to the company's shareholders

CA supplier reduces payment terms to payment on receipt

DA customer agrees to pay the buyer's company upon purchase

EThe buyer's company offers sales discounts and promotions

Show Suggested Answer

Suggested Answer: A, D

Comprehensive and Detailed Explanation (from CIPS L4M2 -- Financial Management in Procurement)

Positive cash flow arises when money flows into the business:

A . Bank loan immediate inflow of cash.

D . Customer pays upon purchase quick revenue collection, improving liquidity.

The other options either delay or reduce available cash (outflows).

Relevant L4M2 references:

''Cash flow and working capital in procurement decision-making''

''Financial metrics in business case justification''

by Malcom at Sep 30, 2026, 04:51 PM

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Bong

1 day ago

I practiced a similar question, and I think A and D make sense since they directly bring cash into the company.

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Donte

6 days ago

I'm not entirely sure, but I remember something about how reducing payment terms can actually hurt cash flow, so maybe C isn't a good choice.

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Shantay

11 days ago

I think A and D are the right answers because a loan increases cash flow and getting paid upfront helps too.

upvoted 0 times

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