ABC plc has a quick (liquidity) ratio (receivables plus cash divided by payables) equal to two. The directors believe th

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ABC plc has a quick (liquidity) ratio (receivables pluscash divided by payables) equal to two. The directors believe thatthe cash balance is too low and have decided to extend thecompany's payment terms to suppliers from one month to twomonths.
What would be the effect (if any) on the company's cashoperating cycle and quick (liquidity) ratio?
Operating cycle will
A.increase
B. decrease
C. not change
Quick (liquidity) ratio will
D. increase
E. decrease
F. not change