You Are Considering Switching from an All Cash Credit Policy

question 74

Multiple Choice

You are considering switching from an all cash credit policy to a net 30 credit policy.You do not expect the switch to affect either your sales quantity or your sales price.Ignoring interest and assuming that every month has 30 days,your net present value of the switch will be equal to:

• A)zero.
• B)your selling price per unit.
• C)your selling price per unit multiplied by -1.
• D)your selling price per unit multiplied by -30.
• E)your total monthly sales multiplied by -1.

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Definitions:

Prototypes

Original or first examples that serve as a model or benchmark for subsequent versions in product development, design, or conceptualization.

Exemplars

Instances or examples that are typical of a category or group, used in cognitive psychology to understand how people categorize information.

Language Development

The process by which children come to understand and communicate language during early childhood.

Anchoring Heuristic

A cognitive bias that describes the common human tendency to rely too heavily on the first piece of information offered (the "anchor") when making decisions.