Which one of the following is the graphical representation of the sum of the carrying costs and the opportunity costs of a credit policy?
A) Accounts receivables aging
B) Economic credit function
C) Optimal credit curve
D) Credit analysis
E) Credit cost curve

Question

Quizplus · Accepted Answer

The credit cost curve shows the sum of carrying costs and opportunity costs of a credit policy. This curve helps in determining the optimal credit policy by finding the point at which the costs of providing credit are minimized. Therefore, the graphical representation of the sum of the carrying costs and the opportunity costs of a credit policy is the credit cost curve.

Which One of the Following Is the Graphical Representation of the Sum