The Optimal Credit Amount Is Determined By

question 12

Multiple Choice

The optimal credit amount is determined by:

• A)the point which minimizes the total credit cost curve.
• B)the point which maximizes the carrying costs associated with granting credit.
• C)the point which maximizes opportunity costs associated with granting credit.
• D)the point where the additional net cash flow from new customers equals the additional carrying costs of the investment in receivables.
• E)Both A and D

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Definitions:

Warranties of Title

Guarantees provided by a seller to a buyer that they legally own the item being sold and have the right to sell it.

Course of Dealing

The pattern of previous conduct between parties to a contract that establishes a common basis for their understanding.

Trade Usage

Common practices or customs within a particular industry, which can sometimes be recognized as legally binding in contractual agreements.

Express Warranty

A promise or guarantee made by a seller regarding the quality, functionality, or condition of a product, specifically stated to the buyer.