1- The cash cycle is defined as the time between:

a- the arrival of inventory and cash collected from receivables.

b- cash disbursements and cash collection for an item.

c- the sale of inventory and cash collection.

d- selling a product and collecting the accounts receivable.

e- selling a product and paying the supplier of that product.

2 Selling goods and services on credit is:

a- never necessary unless customers cannot pay for the goods.

b- an investment in a customer.

c- never a wise decision.

d- permissible only if your bank lends the money.

e- a decision independent of customers.

3- Since the credit decision usually includes riskier customers, the decision should adjust for this by:

a- determining the probability that customers will not pay and reducing the expected cash flow.

b- discounting the cash inflows at a higher discount rate.

c- discounting the net cash flows at a lower discount rate.

d- increasing the variable cost per unit.

e- decreasing the variable cost per unit.