A Local Lawn Care Business Is Considering Changing Their Credit

Multiple Choice

A local lawn care business is considering changing their credit policy for customers. Their accountant gathered the following information to help management decide. The lawn care business would like to switch to an all-cash sales system since they are collecting only 72% of their credit sales. The management team is not unanimously on board with the idea of making this change. Which of the following reasons is the most likely reason the management team is not on the same page?

A) Existing customers may choose to take their business elsewhere since they like the product offerings of a competitor.
B) Existing customers may choose to take their business elsewhere so they can have more generous terms and will not have to rely on cash for transactions.
C) New customers may choose to go with a competitor due to a more desirable delivery schedule.
D) New customers may choose to go with a competitor due to better discounts offered as part of a promotional credit.