Suppliers Prefer to Offer Trade Credit to Customers with Poor

question 120

True/False

Suppliers prefer to offer trade credit to customers with poor credit ratings or no credit history.

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Definitions:

Fixed Costs

Costs that do not change with the level of goods or services produced by a business, such as rent, salaries, and loan payments.

Operating Risk

The possibility of experiencing financial losses due to factors affecting the day-to-day operations of a company.

EPS

Earnings Per Share; a key financial metric that calculates the portion of a company's profit allocated to each outstanding share of common stock, indicating the company's profitability.

Breakeven Analysis

This analysis determines the point at which revenue equals costs, resulting in neither profit nor loss.