When using the Bardahl formula, an increase in annual credit sales (while holding the average accounts receivable balance constant) has which of the following effects on the working capital requirements?

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An increase in annual credit sales, while keeping the average accounts receivable balance constant, implies that the accounts receivable turnover has increased. This means that the company is collecting its receivables faster, which reduces the working capital requirements.

When Using the Bardahl Formula, an Increase in Annual Credit