Which one of the following will increase the cash cycle?
A) Improving the cash discounts given to customers who pay their accounts early
B) Having a larger percentage of customers paying with cash instead of credit
C) Buying less raw materials to have on hand
D) Paying your suppliers earlier to receive the discount they offer
E) Ordering raw materials inventory only when you need it

Question

Quizplus · Accepted Answer

Paying your suppliers earlier means you have less cash on hand for a longer period of time, thereby increasing the cash cycle.

Which One of the Following Will Increase the Cash Cycle