If a firm is contemplating a relaxation of its credit standards,which of the following might be expected to result?

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If a firm relaxes its credit standards, it becomes easier for customers to purchase goods on credit, which can result in an increase in investment in accounts receivable. This means more money tied up in unpaid invoices, which can impact the firm's cash flow. It may also lead to an increase in bad debt expense, as customers who were previously considered too risky for credit may now be approved, leading to a higher incidence of non-payment. However, there is no inherent reason why a relaxation of credit standards should result in decreased unit sales or increased contribution margin.

If a Firm Is Contemplating a Relaxation of Its Credit