As a rule, managers should try to always use the free component of trade credit but should use the costly component only if the cost of this credit is lower than the cost of credit from other sources.

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Managers should always try to use the free component of trade credit as it does not involve any direct cost. However, if they need to use the costly component, they should compare the cost of this credit with the cost of credit from other sources, such as bank loans or issuing bonds, to ensure they are getting the best deal.

As a Rule, Managers Should Try to Always Use the Free