If Easing a Firm's Credit Policy Lengthens the Collection Period

question 81

Multiple Choice

If easing a firm's credit policy lengthens the collection period and results in a worsening of the aging schedule, then why do firms take such actions?

• A) It normally stimulates sales.
• B) To meet competitive pressures.
• C) To increase the firm's deferral period for payables.
• D) Statements a and b are correct.
• E) All of the statements above are correct.

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