Which one of the following assumptions is made when declaring that the break-even probability of collection is lower for customers with repeat orders?
A) The discount rate is fairly high.
B) The cost of the item will continually decline.
C) The sales price of the item will continually increase.
D)Payment on the first order ensures payments on subsequent orders.

Question

Quizplus · Accepted Answer

Assuming that payment on the first order ensures payment on subsequent orders means that the risk of non-payment decreases with repeat customers. This lower risk results in a lower break-even probability of collection, as compared to first-time customers where the risk of non-payment is higher.

Which One of the Following Assumptions Is Made When Declaring