A firm currently has sales of $2,000,000 and does not offer credit. Management expects sales to rise to $2,500,000 if it offers customers thirty days to pay. Which of the following will probably happen? 1. receivables will turn over more rapidly 2. receivables will turn over more slowly 3. credit sales will increase by more than the increase in sales 4. credit sales will increase by less than the increase in sales
A. 1 and 3
B. 1 and 4
C. 2 and 3
D. 2 and 4
Answer: C
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