Which of the Following Statements Concerning Seasonal Credit Is TRUE

question 16

Multiple Choice

Which of the following statements concerning seasonal credit is TRUE?

• A) It tends to have a lower interest rate than federal funds.
• B) It has become increasingly more important in recent years.
• C) Only firms receiving secondary credit are eligible to receive seasonal credit.
• D) Improvements in credit markets have reduced the need for a seasonal credit facility.

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Definitions:

Retail Price

The total cost at which a product is sold to the end consumer, inclusive of all taxes, shipping, and handling fees.

Operating Expenses

Costs associated with running a day-to-day business operation, such as salaries, rent, and utilities.

Mark-up

An extra charge on top of the cost price for items, aimed at covering both overhead expenses and profits, described in terms of a percentage of the initial cost.

Profit or Loss

The financial result of operations, where profit is the excess of revenues over expenses and loss is the deficit.