Which of the Following Statements Correctly Reflect the Effects of Granting

question 54

Multiple Choice

Which of the following statements correctly reflect the effects of granting credit to customers?
I.Total revenues may increase if both the quantity sold and the price per unit increase when credit is granted.
II.A firm's cash cycle generally increases if credit is granted,all else equal.
III.Both the cost of default and the cost of discounts must be considered before granting credit.
IV.A firm may have to increase its long-term borrowing if it decides to grant credit to its customers.

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

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Definitions:

Lethargic

describes a state of sluggishness, fatigue, or lack of energy, often resulting from illness, lack of sleep, or other factors.

Major Depressive Disorder

A clinical condition characterized by persistent feelings of sadness, hopelessness, and loss of interest, significantly affecting daily functioning.

Worthless

The feeling or state of being without value, significance, or utility; often used to describe intense feelings of insignificance or despair.

Bipolar Disorder

Bipolar Disorder is a mental health condition characterized by extreme mood swings that include emotional highs (mania or hypomania) and lows (depression).