Step 1: Scenario---> Assume you are a financial manager of a firm that sells most of its product on credit and also buys much of its raw materials on credit.

Step 2: Answer questions from the above scenario to help answer these questions:^^^^

I. Explain the importance of your credit standards that you extend to your customers.

II. What are the options available to you to finance your inventory short-term?

III. What is the cost of forgoing a 2/10 net 30 trade discount to your firm?