12. (TCO 2) Which of the following statements is true? (Points : 4) The optimal

Question

12. (TCO 2) Which of the following statements is true? (Points : 4)
The optimal credit policy minimizes the total cost of granting credit.
Firms should avoid offering credit at all cost.
An increase in a firm's average collection period generally indicates that an increased number of customers are taking advantage of the cash discount.
Character, refers to the ability of a firm to meet its credit obligations out its operating cash flows.
The optimal credit policy, is the policy that produces the largest amount of sales for a firm.


13. (TCO 2) Which one of the following industries is most apt to have the shortest cash cycle? (Points : 4)
electric utility company
airplane manufacturer
fast-food restaurant
furniture store
clothing manufacturer

Explanation / Answer

The optimal credit policy, is the policy that produces the largest amount of sales for a firm. airplane manufacturer

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