Question: Indicate by a (+), (-), or (0) whether each of the following events would probably cause A/R, sales, and profits to increase, decrease, or be

Indicate by a (+), (-), or (0) whether each of the following events would probably cause A/R, sales, and profits to increase, decrease, or be affected in an indeterminate manner. Also provide an explanation for each event and the affects. (7pts)

AR Sales Profit

a. The firm tightens its credit

standards. __ __ __

b. The terms of trade are

changed from 2/10, net 30,

to 3/10, net 30. __ __ __

c. The terms are changed from

2/10 net 30, to 3/10, net 40. __ __ __

d. The credit manager gets tough

with past-due accounts __ __ __

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