LTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the questio 1) The three primary policy variables to consider when extending credit include all of the following except A) the terms of trade. C) collection policy. B) credit standards. D) the level of inflation. 2) We expect that we can receive annual incremental income after taxes of $25,000, including an adjustment for uncollectible accounts. What is the maximum commitment to A/R that we should be willing to assume if our firm's minimum required after-tax return is 8%? A) $312,500 B) S180,000 C) S168,000 D) $36,000 3) Warren Enterprises expects 20,000 unit sales, has ordering costs of $20 per order, carrying costs of $1.00 per unit, and desires to keep 100 units in safety stock. Assuming level production, what should be its average inventory? A) 301-400 B)401-500 C) 501-600 D) 200-300 UEFALSE. Write T if the statement is true and 'F if the itatement is false. ) Myrdal Boots can take a cash discount but has to borrow money from the bank to do so. The bank offers a 12% interest rate. The terms of the cash discount are 3/ 10, net 90. Because of this, Myrdal Boots should borrow from the bank to take the discount. ULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question 5) Kantorovich Company normally takes 30 days to pay for its average daily credit purchases of $2,000. It has average daily sales of $3,000, and collects accounts in 25 days. What is its net credit position? A) (S1,000) B) $15,000 C) ($15,000) D) $1,000 6) Analog Computers needs to borrow $475,000 from the Midland Bank. The bank requires a 15% compensating balance. How much money will Analog need to borrow in order to end up with $475,000 spendable cash? A) $758,264 B) $71,250 C) $558,824 D) $546,250 7) Kenneth's Arrows and Bows borrow SI 5,000 for one year at 8% annual interest, what is the effective rate of interest if the loan is discounted? A) More than 8.5% but less than 9.5% C) Less than 8.5% B) More than 10.5% D) More than 9.5% but less than 10.5%