Decisions to Retain, Eliminate, Expand or Contract a Segment of the Business

question 80

True/False

Decisions to retain, eliminate, expand or contract a segment of the business are based on the analysis of gross margin of the department or product.

---

Definitions:

Prompt Payment Discount

A discount offered to buyers for paying their invoices early, encouraging faster payments.

Pledged

Assets or collateral that a borrower offers to a lender to secure a loan, which the lender may seize if the loan is not repaid.

Default Risk

The risk of loss to a lender from the borrower’s failure to pay the full amount due including interest and principal.

Commercial Paper

An unsecured, short-term debt instrument issued by corporations, typically used for the financing of accounts receivable, inventories, and meeting short-term liabilities.