The Optimal Amount of Credit Equates the Incremental Costs of Carrying

question 81

Multiple Choice

The optimal amount of credit equates the incremental costs of carrying the increase in accounts receivable to the incremental:

• A) decrease in the cash cycle.
• B) benefit from decreasing the inventory level.
• C) cash flows from increased sales.
• D) increase in bad debts.
• E) gain in net profits.

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Definitions:

Salty Tastes

One of the basic tastes, characterized by the presence of salt, often leading to enhancement of flavor in foods.

Corpus Callosum

The large band of neural fibers connecting the two hemispheres of the brain, facilitating interhemispheric communication.

Adrenal Gland

An endocrine organ located above the kidneys that produces hormones such as adrenaline and cortisol, which help regulate metabolism, stress response, and blood pressure.

Sodium

A chemical element, symbol Na, involved in maintaining normal fluid balance, nerve function, and muscle contraction.