________ is a procedure resulting in a number reflecting an applicant’s credit strength, derived as a weighted average of the scores obtained on a variety of key financial and credit characteristics. A) Credit scoring B) Aging of receivables C) CAPM D) The economic order quantity model ANSWER A
Date: September 19th, 2020
The key dimension of credit selection which analyzes an applicant’s ability to repay the requested credit focused on cash flows available is ________. A) collateral B) capital C) conditions D) capacity ANSWER D
Date: September 19th, 2020
Which of the following is true of credit scoring? A) It audits the amount of assets the applicant has available for use in securing the credit. B) It specifies the terms of sale for customers who have been extended credit by a firm. C) It is an ongoing review of a firm’s accounts receivable to […]
Date: September 19th, 2020
________ are established to evaluate a customer’s creditworthiness and to determine the minimum requirements for extending credit to a customer. A) Lines of credit B) Credit limits C) Collection agencies D) Credit standards ANSWER D
Date: September 19th, 2020
The key dimension of credit selection which analyzes the amount of assets an applicant has available for use in securing the credit is ________. A) capital B) collateral C) capacity D) conditions ANSWER B
Date: September 19th, 2020
Joe Manufacturing uses 2,400 units of a product per year on a continuous basis. The product carrying costs are $60 per year and ordering costs are $250 per order. It takes 20 days to receive a shipment after an order is placed and the firm requires a safety stock of 8 days of usage in […]
Date: September 19th, 2020
A firm’s credit selection procedures must be established on a sound economic basis that considers the costs of investigating the creditworthiness of a customer and the expected size of its credit purchases. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
One of the components of a cash conversion cycle is the average collection period. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
A firm’s credit standard is a procedure for ranking an applicant’s overall credit strength, derived as a weighted average of scores on key financial and credit characteristics. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
bonds pay coupon interest in the form of additional bonds instead of cash. a. Deferred coupon b. Payment-in-kind c. Zero-coupon d. In lieu ANSWER B
Date: September 19th, 2020
