A Line of Credit Is

question 148

Multiple Choice

A line of credit is

• A) The equal payments required for one-time loans.
• B) The loan amount for installment cash credit.
• C) The maximum loan amount for closed-end credit.
• D) The maximum dollar amount of credit the lender has made available.
• E) The monthly payment required for single lump-sum credit.

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Definitions:

Variable Costs

Expenses that are directly tied to the rate of goods produced or services sold, such as the cost of materials and labor involved.

Fixed Costs

Costs that remain constant for a business over a period, regardless of the level of goods or services produced.

Composite Units

Units formed by combining different but related items, often used in production or inventory management.

Contribution Margin

The difference between sales revenue and variable costs, indicating how much contributes to covering fixed costs and generating profit.