If a firm reduces its accounts payable period,other things equal,it increases its cash holdings.

Question

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If a firm reduces its accounts payable period, it means that it is taking longer to pay its suppliers. This may lead to strained relationships with suppliers and potential supply chain disruptions. Additionally, it may result in the firm losing out on discounts or other incentives offered for prompt payment. Therefore, while the firm may improve its liquidity in the short-term by delaying payments, it could hurt its long-term financial health.

If a Firm Reduces Its Accounts Payable Period,other Things Equal,it