A firm can reduce its cash conversion cycle by
A) increasing its average age of inventory
B) increasing its average collection period
C) decreasing its average payment period
D) increasing its average payment period

Question

Quizplus · Accepted Answer

Increasing the average payment period allows a firm more time to hold onto its cash before paying its suppliers, effectively reducing its cash conversion cycle by delaying outflows of cash.

A Firm Can Reduce Its Cash Conversion Cycle by