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One of the disadvantages of extending credit to customers is that A. The firm s debt collection costs are increasing while at the same time
One of the disadvantages of extending credit to customers is that
A. The firm s debt collection costs are increasing while at the same time cash is decreasing. B. More cash is tied up because the firm s inventory has to increase as a result of the extension of credit. C. Operating cash flow decreases because of the jump in accumulated depreciation. D. The firm s gross profit margin increases because extending credit also increases the cost of goods sold.
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