A decrease in the average age of inventory will result in ________ in the cash conversion cycle.
A) an increase
B) a decrease
C) an undetermined change
D) no change

Question

Quizplus · Accepted Answer

A decrease in the average age of inventory means that inventory is being sold off more quickly, resulting in a shorter amount of time between when cash is paid for inventory and when that inventory is sold and cash is received. This will result in a decrease in the cash conversion cycle.

A Decrease in the Average Age of Inventory Will Result