An advantage of offering more lenient credit terms is that it helps a firm _____.
A)decrease its debt
B)increase its sales
C)reduce its risk
D)improve cash flows

Question

Quizplus · Accepted Answer

By offering more lenient credit terms, a firm can make it easier for customers to make purchases without immediate payment, which can increase sales.

Answer: D 
 While more lenient credit terms may temporarily reduce cash flows due to delayed payments, over time it can lead to improved cash flows as customers continue to make purchases and repay their debts.

An Advantage of Offering More Lenient Credit Terms Is That