A firm that extends credit for only 30 days is likely to receive its payments faster than a firm that allows customers 60 or 90 days, but such a policy may also result in loss of sales.

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If a firm extends credit for only 30 days, it is likely to receive payments faster but it may also discourage customers who need longer payment terms or may not be able to pay within 30 days, resulting in loss of sales.

A Firm That Extends Credit for Only 30 Days Is