A Firm with a Cash Conversion Cycle of 175 Days

question 106

Multiple Choice

A firm with a cash conversion cycle of 175 days can stretch its average payment period from 30 days to 45 days. This will result in a(n)

• A) decrease of 30 days in the cash conversion cycle.
• B) decrease of 15 days in the cash conversion cycle.
• C) increase of 15 days in the cash conversion cycle.
• D) increase of 30 days in the cash conversion cycle.

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Definitions:

Internal Attributions

The tendency to explain one's own behavior and the behavior of others based on internal, character-based factors.

Self-Serving Bias

A cognitive bias where individuals attribute their successes to internal factors and their failures to external factors.

Fundamental Attribution Error

The cognitive bias that leads individuals to overemphasize personal traits and underestimate the influence of situational factors when explaining other people's behavior.

Halo Effect

The halo effect is a cognitive bias where an observer's overall impression of a person, company, or brand influences their feelings and thoughts about that entity's character or properties.