If a fiRm Refuses to Offer Credit, the Net Present

question 71

Multiple Choice

If a firm refuses to offer credit, the net present value of the transaction is:

• A)the cash revenues received minus the cost paid in time period 0.
• B)the discounted value of the revenues from time period 0.
• C)the net cash flow from the future payments to be received.
• D)the cash revenues received minus the discounted net cash flow in time period 0.
• E)always equal to zero.

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Definitions:

Liberal Theory

Liberal theory advocates for individual rights, free trade, and minimal government intervention in the economy, emphasizing individual freedom and equality.

Conservative Theory

A political and social philosophy that promotes retaining traditional social institutions in the context of culture and civilization.

Subsist

To maintain or support oneself, especially at a minimal level.

Welfare Mothers

Term often used to describe single mothers who receive government assistance, typically through cash aid, to help support their families.