Which One of the Following Changes to the Terms of Credit

question 94

Multiple Choice

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

• 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:

Ordinal

A type of data or scale that shows an ordered relationship among the variable's possible values, but does not specify the magnitude of difference between them.

Nominal

Referring to data classified into categories without a natural order or ranking among the categories.

Interval Data

A type of data that consists of numerical scores that exist on a scale with equal intervals between values but no true zero point.

Nominal Data

Categorical data that cannot be ordered or ranked in a meaningful way.