Which of the Following Changes to the Terms of Credit

question 3

Multiple Choice

Which of the following changes to the terms of credit would make the effective annual rate increase?

• A)Increase the cash discount percentage
• B)Extend the discount period
• C)Extend the payment period
• D)All changes above will increase the effective rate

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Definitions:

Tenancy In Common

A form of co-ownership where each owner holds an individual, undivided interest in the property, and there is no right of survivorship.

Community Property

A form of joint property ownership typically between spouses in which assets acquired during marriage are owned equally.

Joint Tenancy

A form of property ownership in which two or more individuals hold equal shares and rights; upon the death of one tenant, their share automatically transfers to the surviving tenant(s).

Life Tenant

An individual who has the right to use and benefit from property during their lifetime, after which the property passes to another designated party.