Suppose a Firm Changes Its Credit Policy from 2/10 Net

question 85

True/False

Suppose a firm changes its credit policy from 2/10 net 30 to 3/10 net 30.The change is meant to meet competition, so no increase in sales is expected.The average accounts receivable balance will probably decline as a result of this change.

---

Definitions:

Scatter Plot

A type of graph that illustrates the relationship between two variable quantities, with each pair of points plotted as coordinates on the Cartesian plane.

Time-Series Components

Distinct elements that constitute time-series data, typically including trend, seasonal, cyclical, and irregular components.

Quarterly Time Series

Data collected, distributed, or analyzed at intervals of three months, often used to identify trends over time.

Residual Plot

A graphical representation where residuals (differences between observed and predicted values) of a regression analysis are plotted against predicted values to assess the fit of a model.