If a Company Making Only Cash Sales Is Considering Allowing

question 137

Multiple Choice

If a company making only cash sales is considering allowing customer credit, then __________.

• A) Sales will likely decrease.
• B) The change will result in a source of funds.
• C) Receivables will likely increase.
• D) Net working capital will decrease if funding needs are met with long-term liabilities.
• E) Expenses will fall due to monthly billings and collection efforts.

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Definitions:

Market Share

The segment of a market held by a certain company or product.

Market Growth

An increase in the demand for a particular product or service over time, which can be influenced by factors like changes in consumer preference, population growth, and technological advancement.

BCG Matrix

A strategic business tool developed by the Boston Consulting Group that uses market growth rate and market share to evaluate the relative performance of products or business units.

Market Leaders

Market leaders are companies that hold the largest market share in a particular industry or category, often setting trends, pricing standards, and competitive benchmarks.