Which of the Following Changes to the Terms of Credit

question 35

Multiple Choice

Which of the following changes to the terms of credit would make the effective annual rate increase?

• A)Increase the cash discount percentage
• B)Extend the discount period
• C)Extend the payment period
• D)All of these changes will increase the effective rate

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Definitions:

Participants

Individuals who take part in something, especially in an experiment or study.

Decision Making

The cognitive process of selecting a course of action among several alternatives to achieve a desired outcome.

Reasoning

refers to the cognitive process of looking for reasons, engaging in logical thinking, and arriving at conclusions based on premises.

System II Thinking

A cognitive process that involves analytical, effortful, and logical thinking as opposed to quick, instinctual, and often biased System I thinking.