a rule, managers should try to always use the free component of trade credit but should use the costly component only if the cost of this credit is lower than the cost of credit from other sources.

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It is generally recommended that managers use the free component of trade credit whenever possible, as it does not incur any additional costs. However, if the cost of the costly component of trade credit is lower than other sources of credit, then it may be a viable option.

A Rule, Managers Should Try to Always Use the Free