If a Firm with Credit Terms of 2/10 Net 30

question 44

Multiple Choice

If a firm with credit terms of 2/10 net 30 were to change its terms to 2/10 net 60,the result would probably be

• A) more customers would take advantage of the cash discount.
• B) fewer customers would take advantage of the cash discount.
• C) increased accounts receivable turnover.
• D) a reduction in safety stock.

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Definitions:

Liability of Foreignness

The disadvantages or additional costs that firms operating in a foreign country face compared to local firms.

Geographic Distance

Reflects the physical space between two points on the earth, often impacting economic, social, and political interactions.

Nonequity Modes

International business arrangements that do not involve the exchange of ownership shares, such as licensing agreements and management contracts.

Equity Modes

Methods or strategies employed in acquiring ownership or stakes in companies.