The Accounts Receivable Approach to Credit Policy Supports the Theory

question 49

Multiple Choice

The accounts receivable approach to credit policy supports the theory that:

• A)a firm's risk of offering credit to a new customer is limited to the variable cost of the sold items.
• B)the best credit policy is an all-cash policy.
• C)the cost of offering credit to a new customer is the same as the cost of offering credit to an existing customer.
• D)foregoing cash discounts is a method of obtaining inexpensive short-term financing.
• E)the default risk of a credit policy is the same as the default risk under an all cash-policy if your customers remain the same.

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Definitions:

Bacterial Plasmid

Small, circular, double-stranded DNA molecules found in bacteria that can replicate independently of the chromosomal DNA, often carrying genes beneficial to survival, such as antibiotic resistance genes.

Restriction Enzymes

Enzymes used in molecular biology to cut DNA at specific sequences, allowing for DNA manipulation in genetic engineering and research.

PCR Cycle

A series of temperature-controlled steps in Polymerase Chain Reaction that allows for the replication and amplification of a specific DNA segment.

Inactivate

To make something inactive or ineffective, often used in the context of deactivating enzymes, viruses, or genes.