Anita Khan Sells Lawn and Garden Products in Bulk to Companies

question 28

Multiple Choice

Anita Khan sells lawn and garden products in bulk to companies that do lawn and garden work. She extends credit to her customers for 60 days, but she is worried about cash flow problems. But this is a highly competitive business and most of her competitors also offer credit-some of them for up to 90 days. Anita is also concerned with the cost of billing and collecting money from her customers, some of whom make it a habit of paying late. Which of the following is the most useful advice to Anita?

• A) Anita can reduce her cash flow issues by extending credit for 90 days.
• B) Anita would be able to generate more sales and reduce her collection costs by cutting the credit period to 30 days.
• C) Anita should consider selling her receivables to a factor, thus allowing her to receive cash more quickly and eliminate the hassles associated with collections.
• D) Anita should consider a "cash only" policy and eliminate credit sales. This would eliminate her cash flow problems and free up money and other resources that she now devotes to collecting past-due accounts.

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Definitions:

Abstract Class

A class that cannot be instantiated and is designed to be subclassed, often containing one or more abstract methods which must be implemented by subclasses.

Inner Class

A class defined within another class in Java, useful for logically grouping classes that are only used in one place, improving encapsulation.

Non Static Members

Elements of a class that are specific to each instance and not shared across instances, unlike static members.

Static

A keyword in programming that indicates a member belongs to the class, rather than instances of it, often used for methods and variables.