The Decision Rule a Payables Manager Should Follow When Considering

question 14

Multiple Choice

The decision rule a payables manager should follow when considering how best to apply NPV analysis to payables decisions is to _______________,so long as payment is not made late.

• A)ignore the NPV and follow usual industry payment practices
• B)delay payment for an additional day as long as NPV continues to fall
• C)delay payment for an additional day as long as NPV continues to increase
• D)always pay within the cash discount period

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Definitions:

Resources Used

Refers to the various materials, capital, and human resources that are utilized in the production of goods or services.

Due Date

The specific day by which something is due or expected to be completed, such as a payment or assignment.

Product Completion

The final stage in the production process where a product is finished and ready for sale.

Backward Scheduling

Scheduling that involves arranging production activities around the due date for the product.