Taylor and Swanson currently sells on a cash basis only. The firm is considering switching to a 30-day credit policy. When analyzing the cost benefit of this switching policy, the firm should consider the credit price.

Question

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When analyzing the cost-benefit of switching to a 30-day credit policy, the firm should consider the credit price because offering credit can potentially increase sales but also involves costs such as the risk of non-payment and the cost of financing the credit period.

Taylor and Swanson Currently Sells on a Cash Basis Only