If the cash discount period is increased, the firm's investment in accounts receivable due to discount takers still getting cash discounts but paying later is expected to increase.

Question

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If the cash discount period is increased, more customers may take advantage of the discount and pay later. This means that the firm's investment in accounts receivable will increase as these customers will still receive cash discounts but pay at a later date.

If the Cash Discount Period Is Increased, the Firm's Investment