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Credit selection techniques determine which customers creditworthiness is consistent with the firms credit standards. Two common credit selection techniques are the five Cs of credit

Credit selection techniques determine which customers creditworthiness is consistent with the firms credit standards. Two common credit selection techniques are the five Cs of credit and credit scoring. Changes in credit standards can be evaluated mathematically by assess-ing the effects of a proposed change on profits from sales, the cost of accounts receivable investment, and bad-debt costs.

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