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:

Percentage

A proportion or share in relation to a whole, represented as a fraction of 100.

Removes Carbon

The process of removing carbon typically refers to extracting carbon dioxide (CO2) from the atmosphere or emissions, a critical action for reducing global warming and climate change.

Atmosphere

The layer of gases surrounding a planet, which for Earth is composed primarily of nitrogen and oxygen and protects it from the sun's radiation and space debris.

Photosynthesis

The process by which green plants, algae, and some bacteria convert light energy into chemical energy stored in glucose.