As a Rule,managers Should Try to Always Use the Free

question 54

True/False

As a rule,managers should try to always use the free component of trade credit but should use the costly component only if the cost of this credit is lower than the costs of credit from other sources.

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Definitions:

Enforceable

Refers to a legal agreement or contract that can be legally compelled to be performed or executed as per the terms agreed upon by the parties involved.

Forbearance

A creditor's agreement to postpone, delay, or withhold legal action despite the debtor's failure to meet the terms of the contract.

Statute Of Limitations

A federal or state statute setting the maximum time period during which a certain action can be brought or certain rights enforced.

Consideration

Something of value exchanged between parties in a contract, which is required for the agreement to be legally binding.