If Easing a Firm's Credit Policy Lengthens the Collection Period

Multiple Choice

If easing a firm's credit policy lengthens the collection period and results in a worsening of the aging schedule, then why do firms take such actions?

A) It normally stimulates sales.
B) To meet competitive pressures.
C) To increase the firm's deferral period for payables.
D) Statements a and b are correct.
E) All of the statements above are correct.