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A Company is having difficulty obtaining trade credit because it has a policy of paying its suppliers a month or more late. The Company is

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A Company is having difficulty obtaining trade credit because it has a policy of paying its suppliers a month or more late. The Company is being rejected because of its Capacity Economic condition Collateral Capital Character The cost effects in changing credit policy is demonstrated by which of the following? When the firm offers a cash discount as part of its credit terms, some customers choose to pay early to take advantage of the discount. Although the firm may experience delayed revenues if it grants credit, it still incurs the costs of sales immediately. When the firm grants credit, there is a delay in revenue collections as some customers take advantage of the credit offered and pay later. If the firm grants credit, some percentage of the credit buyers do not pay. When the firm grants credit, it must arrange to finance the resulting receivables. From a Finance perspective, and under credit terms of 2/10, net 25, customers should: Either take the discount or pay on the 25th day, the 25th day Both take the discount and pay on the 25th day. Take the discount and pay on the 2nd day. Take the 10 percent discount and pay immediately. Always pay on the 25th day When the available cash balance at the bank is less than the book balance, this is called: Collection Float Surplus Deficit Net float Disbursement Float

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