If the Cash Discount Period Is Increased, a Firm's Investment

Multiple Choice

If the cash discount period is increased, a firm's investment in accounts receivable is expected to ________.

A) increase because new customers attracted by the new policy will result in new accounts receivable
B) decrease because new customers will doubt the quality of product due to increase in discount
C) increase because existing discount takers will pay more to get more discount
D) decrease because of existing discount takers will now pay earlier to avail the cash discount