Which of the Following Would Not Be Considered a Carrying

question 3

Multiple Choice

Which of the following would not be considered a carrying cost of credit?

• A) Suzie buys $200 of goods on credit but never pays her bill.
• B) It requires 5 hours a week, to review potential new suppliers.
• C) It costs $500 a week to employ Jack to call customers concerning their late payments.
• D) Maxwell, Inc. requires an annual rate of return of 12% on its receivables.
• E) It requires 5 hours a week, at an annual salary of $50,000, for the manager to approve credit applications.

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Definitions:

Import Quota

A government-imposed limit on the quantity of a certain type of good that can be imported into a country, aimed at protecting domestic industries and workers.

Total Revenue

Total revenue is the total amount of money received by a company for goods sold or services provided during a certain period.

Foreign Producers

Companies or individuals that produce goods or services in a country other than where the products are consumed.

Quota

A government-imposed trade restriction that limits the number or monetary value of goods that can be imported or exported during a specified time.