Problem

Determining the Effects of Credit Policy Changes on Receivables Turnover RatioIndicate the...

Determining the Effects of Credit Policy Changes on Receivables Turnover Ratio

Indicate the most likely effect of the following changes in credit policy on the receivables turnover ratio (+ for increase, −for decrease, and NE for no effect).

a. Granted credit with shorter payment deadlines.

b. Increased effectiveness of collection methods.

c. Granted credit to less creditworthy customers.

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