Which of the Following Is the Best Definition of a Captive

question 335

Multiple Choice

Which of the following is the best definition of a captive finance company.

• A) A compilation of accounts receivable by the age of each account.
• B) Wholly owned subsidiary that handles credit extension and receivables financing through commercial paper.
• C) A discount given for a cash purchase.
• D) Procedures followed by a firm in collecting accounts receivable.
• E) Conditions on which a firm sells its goods and services for cash or credit.

---

Definitions:

Penetration Pricing

A marketing strategy where the initial price of a product is set lower than the eventual market price to attract new customers and gain market share.