If the Use of Supplier Financing Decreases and Is Replaced

question 43

Multiple Choice

If the use of supplier financing decreases and is replaced by cash financing for the same level of business activity, the cash cycle will:

• A) increase because days in payables decrease.
• B) stay the same because the change is only on the operating cycle.
• C) decrease because days in payables decrease.
• D) stay the same because business activity does not change.
• E) stay the same because cash is used for payment.

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