If a Firm Is Contemplating a Relaxation of Its Credit

question 94

Multiple Choice

If a firm is contemplating a relaxation of its credit standards,which of the following might be expected to result?

• A) decreased unit sales
• B) increased contribution margin
• C) increased investment in accounts receivable
• D) decreased bad debt expense

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Definitions:

Clique Formations

The process by which groups of individuals with similar interests, values, or backgrounds form exclusive groups within a larger community.

Rivalries

Competitive or antagonistic interactions or relationships between individuals, groups, or entities.

Oligarchy

A form of government where power effectively rests with a small number of people, often distinguished by royalty, wealth, family ties, or military control.

Concentrated Power

A situation where a significant amount of authority or power is held by a small number of individuals or organizations.