Question

if the credit period is increased by the suppliers of the company cash conversion cycle will a)reduced b)increase c)remain same d)unaffected

Answer 1

If the credit period is increased by the suppliers of the company cash conversion cycle will be reduced, so option A is the correct answer.

Credit period is nothing but the time frame allotted by the suppliers to complete the due payment for the product sell.

If they increase the period, the customers will not pay the money immediately so the cash conversion will automatically decrease.

Answer 2

The cash conversion cycle will get reduced if the period for credit is increased by the supplier.

Explanation:

• Credit period is a stipulated time window given by supplier to complete the payment due.
• This can be done by selling the product. If the time period for credit is increased, the customer will not pay the cash immediately.
• This will result in an automatic decrement of cash conversion. So, the credit period shares an inverse relation with cash conversion.

Learn more about cash conversion cycle:

The Cash Conversion Cycle is the length of time between a firm’s purchase of inventory and the receipt of cash from accounts receivable.

(True/False)

https://brainly.in/question/12929426

Role of cash conversion and collection in cash management

https://brainly.in/question/10847376