If you delay paying your suppliers by an additional ten days, then:
A)your payables turnover rate will increase.
B)you will require less bank ﬁnancing of your operations.
C)the cash cycle will increase by ten days.
D)your operating cycle will lengthen by ten days.
E)your stock-out costs will rise.

Question

Quizplus · Accepted Answer

Delaying payment to suppliers by an additional ten days means that a company can use the cash on hand for a longer period before paying its suppliers, thereby reducing the immediate need for bank financing for operations.

If You Delay Paying Your Suppliers by an Additional Ten