Thompson Rentals is switching from an all cash policy to a net 30 day credit policy. As a result, the firm should expect:

A) To have an immediate decreased need for external financing.
B) An immediate increase in total production costs.
C) Total revenue to decrease.
D) Bad debts to decrease.
E) To lower their sales prices in order to retain current customers.

Net 30 Day Credit

A payment term indicating that the full payment is due within 30 days from the invoice date.

External Financing

External financing involves acquiring capital from outside sources to fund business operations and investments, such as through loans, issuing equity, or other forms of financial support from outside the company.

Total Production Costs

The combined costs of materials, labor, and overhead incurred in producing goods.