Which of the Following Strategies Would Continue to Be Effective

question 78

Multiple Choice

Which of the following strategies would continue to be effective if a cash-strapped firm determines that the effective interest rate charged on trade credit is lower than the bank's interest rate?

• A) Take the discount but pay after the discount period.
• B) Borrow from the bank and take the discount.
• C) Ignore the discount, pay at the end of the period.
• D) Take the discount and hope for longer payment float.

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Definitions:

Serious Interference

A significant disruption or hindrance to someone's rights, property, or personal affairs, often used in the context of legal disputes.

Conversion

An unauthorized act that deprives an owner of personal property without their consent, often involving the altering or taking of property.

Pure Opinion

An expression based solely on someone's personal view, belief, or judgment, not on facts or knowledge.

Defamation

A false and harmful statement about someone that damages their reputation, which can be categorized as libel (written) or slander (spoken).