• Indicate the impact of the following on the cash and operating cycles, respectively. Use the letter I to indicate an increase, the letter D for a decrease, and the letter N for no change.

1. The terms of cash discounts offered to customers are made less favorable.

2. The cash discounts offered by suppliers are increased; thus, payments are made earlier.

3. An increased number of customers begin to pay in cash instead of with credit.

4. Fewer raw materials than usual are purchased.

5. A greater percentage of raw material purchases are paid for with credit.

6. More finished goods are produced for inventory instead of for order.