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 change in the level of sales.

Question

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Switching to a 30-day credit policy could potentially increase sales by making purchases more accessible to customers who prefer or need to buy on credit, but it also introduces the risk of non-payment and additional administrative costs.

Taylor and Swanson Currently Sells on a Cash Basis Only