The operating motive for offering trade credit suggests that the amount of credit extended by a business is an alternative to

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Trade credit is often used as a way to manage inventory levels. By offering longer payment terms, a business can delay payment for goods received, allowing them to hold onto their cash for longer and potentially reduce the need for holding excess inventory. Therefore, trade credit is an alternative to increasing or decreasing the level of inventories.

The Operating Motive for Offering Trade Credit Suggests That the Amount