Quiz Ch 20 – Criteria for Granting Credit in a Firm’s Credit Policy
Fundamentals of Corporate Finance
Brealey, Myers, and Marcus
10th Edition
Under what conditions should a firm’s credit policy allow for credit issuance?
Under what conditions should a firm’s credit policy allow for credit issuance?
How is a time draft acknowledged by the customer described?
What action should a firm take if the marginal order cost exceeds the marginal carrying cost of inventory?
What is the term for the set of rules that decides whether or not credit should be extended?
What inventory item is most likely driven by derived-demand?
What factor is often cited as the appropriate upper limit for the credit period offered by a seller?
Which is a more compelling reason to approve credit?
When do customer accounts become delinquent under the terms of sale 2/10, net 60?
What situation does it make sense for a firm to offer a longer credit period to customers?
What factor should be equated with the incremental costs of carrying increased accounts receivable in order to determine the optimal amount of credit?