Something That Changes Incentives So as to Make Otherwise Empty

question 142

Multiple Choice

Something that changes incentives so as to make otherwise empty threats or promises credible is called a:

• A)Nash equilibrium.
• B)commitment device.
• C)strategic device.
• D)dominant strategy.

Understand how the average collection period and credit sales impact the firm's receivables balance.

Comprehend the effects of granting credit on a firm's total revenues, costs, and cash cycle.

Identify the factors influencing credit policy decisions, including the cost of sales and the operational impacts of offering credit.

Analyze the relationship between credit policy and firm financing needs.

---

Definitions:

Principles for Good Governance

Fundamental guidelines and practices that ensure an organization is managed effectively, ethically, and in a manner conducive to its sustainability and accountability.

Ethical Practice

Adherence to moral principles and standards of conduct, particularly in a professional context.

McKinsey & Company

A global management consulting firm that advises businesses, governments, and other organizations on strategic, operational, and management issues.

Assessment Model

A framework or tool used to evaluate the effectiveness, performance, or value of a program, project, or system.