A Firm with a Cash Conversion Cycle of 175 Days

question 99

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/an ________.

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

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Definitions:

Federal Reserve

The central banking system of the United States that aims to provide the nation with a safer, more flexible, and more stable monetary and financial system.

E-money Transactions

Financial transactions carried out electronically, using digital currencies or electronic substitutes for cash.

Electronic Fund Transfer Act

A US federal law designed to protect consumers engaging in electronic transfers, including ATM transactions, direct deposits, and other electronic payments.

Commercial

Related to the buying and selling of goods and services or to business activities in general.