A Firm with a Cash Conversion Cycle of 175 Days

question 91

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) ________ in the cash conversion cycle of ________ days.

• A) increase; 15
• B) decrease; 15
• C) increase; 45
• D) decrease; 45

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Definitions:

Protected Products

Goods that are safeguarded by trade policies or tariffs to give domestic producers a competitive advantage over foreign imports.

Tariff Rates

Taxes or duties imposed by a government on imported or, less commonly, exported goods, often used to protect domestic industries or generate revenue.

Free Trade

An economic policy that allows imports and exports between countries with minimal or no tariffs, quotas, subsidies, or prohibitions to facilitate trade.

Trade-offs

The balancing of factors or alternatives where the improvement of one results in the compromise or decline of another.