If the cash discount period is increased, a firm’s investment in accou

If the cash discount period is increased, a firm’s investment in accounts receivable is expected to ________.

A) increase because existing customers attracted by the new policy will buy more products
B) decrease because of non–discount takers paying earlier to avail the cash discount
C) decrease because discount takers will pay more in order to get more discount
D) decrease because new customers will doubt the quality of product due to increase in discount

ANSWER

B