Why Would a Retailer Offer an In-House Credit Card to Their

question 84

Multiple Choice

Why would a retailer offer an in-house credit card to their customers when proceeds of the sales are tied up as accounts receivable?

• A)Offering credit is a service for the customers making purchases easier for the consumer.
• B)Accounts receivable is not a current asset and has no effect on what is owed to the retailer.
• C)By accepting only cash,assets would generate a low ROI.
• D)Retailers offer credit to increase their average gross margin.

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Definitions:

Managerial Efficiency

The effectiveness with which managers utilize resources and operate businesses to achieve desired outcomes and profitability.

Security Registration

The legal process through which securities are registered with relevant authorities before being offered to the public or placed on the market.

Best Efforts Basis

A best efforts basis is an agreement where an underwriter commits to sell as much of a new securities offering as possible, but not to buy any unsold securities.

Public Offering Price

The price at which new issues of stocks or bonds are offered to the public by an issuer for the first time.