Loosening a firm's credit standards is likely to result in:
A)lower sales.
B)smaller bad-debt losses.
C)a shorter average collection period.
D)None of the above

Question

Quizplus · Accepted Answer

Loosening a firm's credit standards typically results in higher sales due to more customers being able to purchase on credit, potentially larger bad-debt losses because of the increased risk of default by less creditworthy customers, and a longer average collection period as more customers take longer to pay. None of the provided options accurately describe these outcomes.

Loosening a Firm's Credit Standards Is Likely to Result In