When Analyzing the Decision to Change the Cash Discount Policy

question 66

Multiple Choice

When analyzing the decision to change the cash discount policy, the firm should:

• A)choose the policy with the highest order size.
• B)choose the policy with the lowest variable cost.
• C)choose the policy with the lowest NPV.
• D)choose the policy with the highest NPV.
• E)choose the policy offering the lowest cash discount.

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Definitions:

Validity

The accuracy with which a study reflects the true situation.

Bias

A systematic error or deviation from the truth in results or inferences that can affect the validity of research findings.

Randomization

is a process used in experimental designs to allocate subjects randomly to different groups to ensure each group is similar and that the treatment effects can be attributed solely to the treatment being tested.

Concealment of Random Allocation

A technique used in clinical trials to prevent selection bias by ensuring the assignment of participants to different groups is not known in advance by the researchers.