Which of the Following Goals Need to Be Addressed for Extending

question 59

Multiple Choice

Which of the following goals need to be addressed for extending credit to customers?

• A) Getting as many customers as possible
• B) Arranging a loan and making regular payments of interest
• C) Keeping the number of bad accounts as low as possible
• D) Increasing the time between a credit sale and cash receipt

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Definitions:

Net Present Value

The difference between the present value of cash inflows and the present value of cash outflows over a period of time.

Quantitative Decision Rule

An analytical procedure or guideline used to make decisions based on numerical data and mathematical calculations.

Capital Expenditure

A financial outlay made by a company to acquire, maintain, or improve physical assets such as property, plants, and equipment.

Cash Budgeting

The process of estimating future cash inflows and outflows to determine a company's short-term financial health and liquidity.