You have recently been hired to be the COO (Chief Operating Office) of a start-up company and your primary goal is to help grow the business. The company reported sales of $2 million last fiscal year. The company currently does not offer trade credits because the majority of its customers use credit cards. In a bid to expand the business, you are asked to determine whether extending trade credits is a good idea.

(a) List and explain two factors that will be important for you to make this decision? Meaning, as the COO, what factors do you need to take into consideration if you are planning to start offering trade credit.

(b) Given what you know, are you for or against the company offering trade credits.