When considering a switch from an all-cash credit policy to a net 30 credit policy all of the following should be considered except the:
A) revenue effects.
B) effects on the variable costs.
C) cost of the discount.
D) probability of default.
E) change in the fixed costs.

Question

Quizplus · Accepted Answer

When considering a switch from an all-cash credit policy to a net 30 credit policy, it is important to consider the revenue effects, effects on the variable costs, cost of the discount, and probability of default. However, the change in fixed costs is not relevant to this decision. Thus, option E should be excluded.

When Considering a Switch from an All-Cash Credit Policy to a Net