If the cash discount period is increased, the firm's investment in accounts receivable due to non-discount takers now paying earlier is expected to

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When the cash discount period is increased, it becomes more attractive for customers to take advantage of the discount by paying earlier. This reduces the amount of time that accounts receivable (or the money that customers owe the firm) is outstanding, which in turn reduces the firm's investment in accounts receivable. Therefore, the firm's investment in accounts receivable is expected to decrease when the cash discount period is increased.

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