If a firm refuses to offer credit,the net present value of the transaction is:
A) the cash revenues received minus the cost paid in time period 0.
B) the discounted value of the revenues from time period 0.
C) the net cash flow from the future payments to be received.
D) determined by all of these.
E) always equal to zero.

Question

Quizplus · Accepted Answer

If a firm refuses to offer credit, it means that they will only accept cash payments upon delivery. Therefore, the net present value of the transaction would be the cash revenues received minus the cost paid in time period 0. The other options are not relevant in this scenario.

If a Firm Refuses to Offer Credit,the Net Present Value