The Optimal Amount of Credit Equates the Incremental Costs of Carrying

question 81

Multiple Choice

The optimal amount of credit equates the incremental costs of carrying the increase in accounts receivable to the incremental:

• A) decrease in the cash cycle.
• B) benefit from decreasing the inventory level.
• C) cash flows from increased sales.
• D) increase in bad debts.
• E) gain in net profits.

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Definitions:

Acquiring Firm

A business entity that purchases or takes over another company, often to expand its operations, market share, or capabilities.

Procedural Justice

The fairness of the processes that are used to make decisions, relating to how individuals feel they are treated during the decision-making process.

Voice

Refers to the means by which employees can express their concerns, ideas, or opinions within their workplace.

Bias

A tendency to lean in a certain direction, either in favor of or against a particular thing, person, or group compared with another, often in a way considered to be unfair.