Increasing a Credit Period from 30 to 60 Days, in Response

question 16

Multiple Choice

Increasing a credit period from 30 to 60 days, in response to a similar action taken by company's competitors, would likely result in:

• A) An increase in the average collection period.
• B) A decrease in bad debt losses.
• C) An increase in sales.
• D) Higher profits.

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Definitions:

Expensive

Having a high price or cost; being relatively overpriced in comparison to value.

Marginal Utility

The additional satisfaction or benefit gained from consuming one more unit of a good or service.

Dozen Oysters

A quantity or unit measure referring to a group of twelve oysters.

Total Utility

The complete satisfaction or utility gained by consuming a certain amount or number of goods or services.