contestada

to attract new customers, a company offers zero percent credit for new purchases. As a result, they increase their sales but also increase their accounts receivable. Why could this be a problem for the company?
a. the company's statement of cash flows could appear misleading
b. the new customers may tell their friends about the great credit offer
c. they may not have enough cash flow to replenish their inventory
d. the new customers may not want the products they purchased.

Respuesta :

itzamirv2

c. they may not have enough cash flow to replenish their inventory

By offering zero percent credit for new purchases, the company is essentially extending credit to customers without immediate cash payment. This can tie up their cash flow, making it difficult to purchase inventory or cover other operational expenses in the short term. As a result, they may face challenges in managing their working capital and maintaining smooth operations.

Otras preguntas