Which of the Following Practices Will Reduce a Firm's Collection

question 77

Multiple Choice

Which of the following practices will reduce a firm's collection float? I. installing a lockbox system
II) utilizing zero-balance accounts
III) depositing checks daily rather than weekly
IV) reducing the processing delay by one day

• A) I and III only
• B) II and IV only
• C) I, II, and III only
• D) I, III, and IV only
• E) I, II, III, and IV

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Definitions:

Deadweight Loss

The decrease in economic performance that happens when a good or service fails to meet or cannot attain its optimal distribution point.

Marginal Cost

The cost of producing one additional unit of a good or service, considering all variable resources used in production.

Monopolistic Competition

A type of imperfect competition such that many producers sell products that are differentiated from one another (e.g., by branding or quality) and hence are not perfect substitutes.

Irrational Consumers

Refers to the idea that consumers often make decisions that deviate from the assumptions of rationality in economics, such as making impulsive or emotionally driven purchases.