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.

---

Definitions:

Market

An area or arena in which commercial dealings are conducted, including the buying and selling of goods and services.

Segmented Components

Parts or sections of a product designed to be easily separable, often for customization, maintenance, or recycling purposes.

Services

Economic activities that typically produce an intangible product (such as education, entertainment, lodging, government, financial, and health services).

Decision Trees

A graphical representation used for making decisions, showing various outcomes based on different sequences of decision paths.