Deciding Whether or Not to Take a Trade Discount, the Cost

question 26

True/False

deciding whether or not to take a trade discount, the cost of borrowing from a bank or other source should be compared to the cost of trade credit to determine if the cash discount should be taken.

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Definitions:

Systematic Risk

The risk inherent to the entire market or market segment, also known as market risk or un-diversifiable risk.

Risk Premium

The additional return required by investors for taking a higher level of risk, compared to a safer investment.

Recession

A significant decline in economic activity spread across the economy, lasting more than a few months, visible in GDP, real income, employment, industrial production, and wholesale-retail sales.

Inflation

The rate at which the aggregate price level for goods and services grows, weakening the purchasing strength.