Evaluate the effects of a firm relaxing it’s credit policy
Evaluate the effects of a firm relaxing it’s credit policy
Homework Answers
The effects of a firm relaxing it’s credit policy are -
1.Increase in total amount of sales as buyers who are used to credit will get attracted
2.Increase in bad debts as If amount of credit sales will go up so will the debt and so will the bad debt.
3.Higher profits as an effect of hiigher sales due to more credit .
4.It can also lead to decrease in cash discount as firm is promoting credit buyers.
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