Assuming That the Firm Has Done All It Can to Stimulate

question 153

True/False

Assuming that the firm has done all it can to stimulate customers to pay promptly and to select vendors offering the most attractive and flexible credit terms, it can further speed collections and slow disbursements by taking advantage of the "float" existing in the collection and payment systems.

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Definitions:

Net Present Value

A valuation method that reflects the present value of an investment's future net cash flows minus the initial investment cost.

Default Rate

The frequency at which borrowers fail to make scheduled payments on loans or securities.