A firm is considering several policy changes to increase sales.
It will increase the variety of goods it keeps in inventory, but
this will increase inventory by $11,500. It will offer more liberal
sales terms, but this will result in average receivables increasing
by $68,000. These actions are expected to increase sales by
$815,000 per year, and cost of goods will remain at 70% of sales.
Because of the firm’s increased purchases for its own production
needs, average payables will...