Discuss the following:

1. The success or failure of a business depends primarily on the demand for its products, primarily sales. Sales, in-turn, depends on many factors, some exogenous, but others are under the firms control. The major controllable factors are sales prices, product quality, advertising, and the firms credit policy. Explain the four variables of four elements that make up a firms credit policy.

2. Describe the factors which might lead a firm to opt for a low-dividend payout.