One Drawback of Offering Liberal Credit to Customers Is That

question 54

Multiple Choice

One drawback of offering liberal credit to customers is that it can:

• A) delay sales to a future period.
• B) increase the cost of credit to customers.
• C) delay the receipt of cash that the firm needs to meet its financial obligations.
• D) decrease sales by the extension of credit and cause a loss to the company.

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Definitions:

Population Proportion

Population Proportion represents the fraction or percentage of members in a population that exhibit a particular attribute or characteristic.

MPG

Stands for Miles Per Gallon, a measure to estimate the distance a vehicle can travel per gallon of fuel.

Pooled Estimator

A statistical method used to estimate the mean of two or more groups by assuming that they have the same variance.

Weighted Average

An average where each data point contributes to the final average in proportion to its importance or frequency.