For the firm with a seasonal sales pattern, offering seasonal datings to its customers is likely to result in ____.
A) increased sales
B) higher inventory investment and warehousing costs
C) lower receivables investment cost
D) an offer of a cash discount

Question

Quizplus · Accepted Answer

By offering seasonal datings to customers, the firm can encourage them to buy more during its peak season, which would likely result in increased sales. This would also help the firm to manage its inventory levels and minimize the need to hold excess inventory throughout the year. Additionally, if the seasonal datings are structured properly, the firm may be able to lower its receivables investment cost by collecting payment from customers before the end of the season. This would free up cash that could be used to invest in the business or pay off debts. However, offering seasonal datings may still require higher inventory investment and warehousing costs to ensure that the necessary products are available during the peak season. A cash discount may also be offered, but it is not necessarily the primary benefit of offering seasonal datings.

For the Firm with a Seasonal Sales Pattern, Offering Seasonal