Increasing the length of the credit period can increase sales, but both the investment in accounts receivable and bad debt expenses are likely to increase as well.

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Increasing the credit period means customers have more time to pay, which can boost sales. However, this also means a longer wait for payment and a higher risk of customers not paying at all, leading to both increased investment in accounts receivable and bad debt expenses.

Increasing the Length of the Credit Period Can Increase Sales