When a Firm Stretches Accounts Payable Without Hurting Its Credit

question 166

Multiple Choice

When a firm stretches accounts payable without hurting its credit rating, the cost of giving up a cash discount is ________.

• A) reduced
• B) increased
• C) unaffected
• D) increased or decreased depending on the opening accounts payable balance

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Definitions:

Criterion Validity

The extent to which a measure is related to an outcome or, more specifically, the effectiveness of a test in predicting an individual's behavior in specific contexts.

Psychological Test

A standardized measure of a sample of a person's behavior or mental processes.

Personality Trait

A characteristic way of thinking, feeling, and behaving that is relatively stable over time and across situations.

Reliable

The quality of being consistently good in quality or performance; able to be trusted.