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Carrying costs are associated with having current assets and fall into two general categories: 1.The opportunity costs associated with having capital tied up in current
Carrying costsare associated with having current assets and fall into two general categories:
1.The opportunity costs associated with having capital tied up in current assets instead of more productive fixed assets.
2.Explicit costs necessary to maintain the value of the current assets.
If a firm offers longer credit terms to its customers, what will happen to its carrying costs?
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