Which of the Following Assumptions Is Made When Declaring That

question 19

Multiple Choice

Which of the following assumptions is made when declaring that the break-even probability of collection is lower for customers with repeat orders?

• A)The discount rate is fairly high
• B)The cost of the item will continually decline
• C)The sales price of the item will continually increase
• D)Payment on the first order insures payments on subsequent orders

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Definitions:

Internet Access

Internet access denotes the ability of individuals or organizations to connect to the internet using computers, smartphones, or other devices.

Moral Hazard

The risk that a party insulated from risk may behave differently than if they were fully exposed to the risk.

Adverse Selection

A situation where asymmetric information results in high-risk individuals being more likely to participate in an agreement or purchase, negatively affecting the seller or insurer.

Salaried Salesman

A salesperson who is compensated with a fixed salary rather than or in addition to commissions.