Which of the Following Statements Correctly Reflect the Effects of Granting

question 54

Multiple Choice

Which of the following statements correctly reflect the effects of granting credit to customers?
I.Total revenues may increase if both the quantity sold and the price per unit increase when credit is granted.
II.A firm's cash cycle generally increases if credit is granted,all else equal.
III.Both the cost of default and the cost of discounts must be considered before granting credit.
IV.A firm may have to increase its long-term borrowing if it decides to grant credit to its customers.

• A)I, II, and III only
• B)II, III, and IV only
• C)I, III, and IV only
• D)I, II, and IV only
• E)I, II, III, and IV

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Definitions:

Emergent Norm Theory

A theory that suggests norms or behaviors emerge spontaneously in groups in response to shared emotions or events.

Collective Behavior

Behavior that is enacted by a group of people who are acting together, but not necessarily as a result of planning or coordination.

Reformist Movement

A reformist movement seeks to enact change within an existing system, advocating for improvements or corrections without calling for the overthrow of the system itself.

American Civil Rights Movement

A decades-long struggle by African Americans and allies in the mid-20th century to end legalized racial discrimination, disenfranchisement, and racial segregation in the United States.