Answer:
Yes is True that when a firm initiates or increases a cash discount, the net effect on the accounts receivable investment is difficult to determine because the nondiscount takers paying earlier will reduce the accounts receivable investment, while the new customer accounts will increase this investment.
Explanation:
Accounts Receivable is any amount of money owed by customers for purchases made on credit. It is an asset account on the balance sheet since it is money due in the short run.
As a current asset, Accounts Receivable is an important aspect of a businesses' fundamental analysis used to measures a company's liquidity or ability to cover short-term obligations without additional cash flows.
Accounts receivable Investment will be reduced if the firm initiates or increases a cash discount.
The selling price of the price that is offered to the buyer of the goods. The selling price of the car should be $<u><em>75,000</em></u>.
<h3>What is the selling price?</h3>
The selling price is the ultimate value of the goods the seller is willing to offer to the buyer at the time of sale. It is determined by adding up the profit margin to the actual cost of the goods.
The computation of the selling price of the car:
Given,
- Cost price =$60,000
- Margin =25%

Therefore, if Sherry wants to make 25% on the sale of each car then the car must be sold at $75,000 each.
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