Hamish plc expects to have an overdraft at the end of the next financial year. Which one of the following courses of action would increase the bank overdraft?
A) Reducing the level of inventory held.
B) Increasing the credit period allowed to customers.
C) Increasing the time taken to pay suppliers.
D) Renting, instead of purchasing, the new company vans.

Question

Quizplus · Accepted Answer

Increasing the credit period allowed to customers would delay cash inflows, potentially increasing the overdraft.

Hamish Plc Expects to Have an Overdraft at the End