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A firm has just relaxed its credit terms. Bad debts are expected to increase from...

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Finance

A firm has just relaxed its credit terms. Bad debts are expected to increase from R19 000 to R31 000 per year because of this change.

Credit sales have increased from R200 000 to R280 000 because of the relaxed credit terms.

Calculate the increase/decrease in the bad debt ratio because of the relaxation of credit standards.

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