Asked by Adrienne Hilton on Jul 26, 2024
Verified
Which of the following is considered a carrying cost associated with granting credit?
A) A firm's required return on payables.
B) A firm's gains from bad debts.
C) A firm's cost of managing credit.
D) A firm's cost of managing payments to suppliers.
E) A firm's cost of equity.
Carrying Cost
The total cost of holding inventory, including storage, maintenance, and insurance.
Managing Credit
The process of monitoring and controlling a person's or business's credit usage and payments to ensure financial stability and minimize risk of default.
Required Return
The minimum return an investor expects to achieve by investing in a particular asset, considering its risk level.
- Acquire knowledge about the vital role and practices of managing receivables, and their consequences on cash flow.
Verified Answer
Learning Objectives
- Acquire knowledge about the vital role and practices of managing receivables, and their consequences on cash flow.
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