A Customer's Credit Is Checked Before Checking the Availability of Goods

question 36

Multiple Choice

A customer's credit is checked before checking the availability of goods in order to ________.

• A) increase the rate of credit approval of customers
• B) arrange for the special terms requested
• C) prevent the wastage of shipping-verification labor
• D) align the processes with organizational goals

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Definitions:

Cost Of Capital

The rate of return required by a capital provider—debt or equity—for investing in a company.

Crossover Rate

Crossover Rate is the point at which two or more investment alternatives have the same net present value, used in capital budgeting to compare the desirability of projects.

WACC

A firm’s capital expenses are determined through the Weighted Average Cost of Capital, which proportionally weighs each category of capital.

NPV

Net Present Value - a financial metric used to evaluate the profitability of an investment or project, taking into account the time value of money by discounting future cash flows.