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Suppose a company increases its sales by giving customers an interest holiday whereby customers can delay payment for the goods and pay no interest. The
Suppose a company increases its sales by giving customers an interest holiday whereby customers can delay payment for the goods and pay no interest. The company offers this option because its sales growth is falling behind projections. Some customers, who would otherwise pay cash, will take advantage of this offer causing the companys receivables to increase by 10% while its sales only increased by 6%. what happens to the receivables turnover ratio and days of sales outstanding
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