A firm has decided to increase the time it takes to pay suppliers from 45 days to 55 days. The industry average is 30 days. Holding all other variables constant, which of the following statement(s) is/are true?
A) The firm is stretching payables
B) Current liabilities will increase
C) The current ratio will decrease
D) Both a & b
E) All of the above (a, b, and c) are correct.
Correct Answer:
Verified
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