Which One of the Following Changes to the Terms of Credit

question 84

Multiple Choice

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

• A) Increasing the cash discount percentage
• B) Extending the discount period and payment period by 10 days each
• C) Extending the payment period only
• D)Decreasing the discount period only

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Definitions:

Dead Metaphor

A metaphor that has been used so often it has lost its original figurative meaning and is taken literally.

Literal Meaning

The explicit or direct meaning of a word or text, without the use of metaphor, exaggeration, or any other figure of speech.

Metaphor

A figure of speech in which a word or phrase is applied to an object or action to which it is not literally applicable.

Concept

A theoretical notion that captures the core features of its subject.