Which One of the Following Statements Is Correct

question 126

Multiple Choice

Which one of the following statements is correct?

• A) If the majority of your new customers become repeat customers then there is a strong argument against extending credit even if the default rate is low.
• B) A customer's past payment history is not indicative of their future payment history.
• C) A suggested policy for offering credit to new customers is to limit the amount of their initial credit purchase.
• D) The risk of issuing credit is the same for a new customer as it is for an existing customer.
• E) The recommended credit policy for new customers is to extend the maximum amount you are willing to ever extend to that customer as their initial credit limit.

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Definitions:

Argyris

Refers to Chris Argyris, a pioneer in the field of organizational development, known for his work on the theory of organization behavior.

Highest Productivity

The maximum level of efficiency in which goods and services are produced with the least amount of resources in a given time period.

Principle of Specialization

A core principle that suggests individuals or organizations are more efficient and effective when they focus on a limited set of tasks or a specific area of expertise.

Classical Management Approaches

Early theories of organizational management focusing on efficiency, hierarchy, and clear division of labor.