An increase in the average payment period will result in ________ in the operating cycle and ________ in the cash conversion cycle.
A) an increase; a decrease
B) a decrease; a decrease
C) a decrease; no change
D) no change; a decrease

Question

Quizplus · Accepted Answer

An increase in the average payment period does not affect the operating cycle but decreases the cash conversion cycle because it extends the time a company can use its cash before paying its liabilities.

An Increase in the Average Payment Period Will Result in ________