A 2/10,net 30 Credit Policy

question 21

Multiple Choice

A 2/10,net 30 credit policy:

• A)is an expensive form of short-term credit if a buyer foregoes the discount.
• B)provides cheap financing to the buyer for 30 days.
• C)is an inexpensive means of reducing the seller's collection period if every customer takes the discount.
• D)tends to have little effect on the seller's collection period.
• E)tends to increase a firm's investment in receivables as compared to a straight net 30 policy.

Appreciate the role of diversity in affecting decision-making processes.

Analyze and compare different decision-making processes and models through critical examination.

Understand the concept of self-efficacy and its impact on goal-setting and performance.

Identify and differentiate between McGregor's Theory X and Theory Y and their implications for management practices.

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Definitions:

Borrowing Costs

Expenses incurred by an entity for borrowing funds, including interest, arrangement fees, and other related costs.

Future

A standardized financial contract obligating the buyer to purchase, and the seller to sell, a specific asset at a predetermined future date and price.

Transactions Exposure

The risk that a company's financial performance or position may be affected by fluctuations in exchange rates impacting transactions in foreign currencies.

Financial Risk

A potential for financial loss inherent in an investment or business operation.