In establishing credit standards, the firm must consider the nature of the credit risk based on all of the following, except:

prior record of payment

terms of credit

financial stability

current net worth

terms of credit

Financial Management Author: rikazzz

A. reflects the firm’s commitment to fixed, financial assets

B. has no impact on the earning of the firm

C. reflects the amount of debt used in the capital structure of the firm

D. primarily affects the left side of the balance sheet

A. their buyers’ forecasts for the coming season

B. matching sales and inventory levels

C. decreasing inventory turnover

D. their investment in capital assets

A. investors generally prefer to invest short periods of time

B. government policy maintains this relationship

C. there is greater risk in long-term bonds

D. exchange rate fluctuations establish this relationship

A. is more expensive than the use of collection centers

B. utilizes local banks to clear local payments made to the collection center

C. provides more float than collection centers

D. results in checks being forward to a P.O. box and clearing through local banks

A. yield

B. maturity

C. marketability

D. maximum investment allowed

A. a reduction in price if payment is made within the specified time period

B. a discount offered to critical suppliers

C. a discount applied to volume sales

D. a discount or the repayment of the firm’s debt

A. a short term obligation of the government issued to commercial investors

B. short term unsecured promissory notes issued by corporations

C. an insignificant source of funds to large corporations

D. the debt obligations of chartered banks

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