An increase in the average collection period will result in in the working capital cycle.

Question

Quizplus · Accepted Answer

An increase in the average collection period means that it takes longer for a company to collect payment for its goods or services, which means that cash is tied up in accounts receivable for a longer period of time. This leads to an increase in the working capital cycle, as the company needs to wait longer to receive cash that can be used to pay for its own expenses or invest in growth opportunities.

An Increase in the Average Collection Period Will Result in In the Working