One of the Following Lists Constitutes the Five Cs of Credit

question 82

Multiple Choice

One of the following lists constitutes the five Cs of credit. Select the correct one.

• A) character, capacity, capital, collateral, characteristics
• B) character, capacity, capital, collateral, co-insurance
• C) character, capacity, capital, collateral, careful
• D) character, capacity, capital, collateral, conditions
• E) character, capacity, capital, collateral, credence

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Definitions:

Variable Costs

Costs that vary directly with the level of production or volume of output, such as raw materials and labor directly involved in manufacturing.

Activity Levels

A measure used in cost accounting to evaluate the relation between the cost of a particular activity and the level of activity executed.

Operating Leverage

A measure of how revenue growth translates into growth in operating income, determined by the proportion of fixed versus variable costs a company has.

Contribution Margin

The difference between sales revenue and variable costs, indicating how much contributes towards covering fixed costs and generating profit.