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7. The longer the firms accounts payable period, the: A. longer the firms cash cycle. B. greater the delay in the accounts
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Answer #1

Answer : Correct Option is C.) Less the firm must invest in Working Capital

Reason :

Accounts Payable period meand the time taken by the entity to pay its creditors . Accounts Payable Period has inverse relationship with cash conversion cycle. The longer the accounts payable period the shorter is the cash conversion cycle. If the accounts payable period is long means firm is making payment late which means availability of cash with the entity which lowers the requirement of working capital This is a source of cash . Thus longer the firm's accounts payable period Less the firm must invest in Working Capital.

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