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April 27, 2015

Homework Help: finance firm's sales on credit

Posted by Jason on Friday, July 25, 2008 at 1:08pm.

In general, the larger the portion of a firm's sales that are on credit, the:

A. lower will be the firm's need to borrow
B. higher will be the firm's need to borrow
C. more rapidly credit sales will be paid off
D. more the firm can buy raw materials on credit

This question seems straight foward, the more a firm sells on credit the less inventory and cash the company will have. The company may have to borrow the maoney it needs to operate.

B is my answer ....is this correct?

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