A ______________ factor of credit policy effects occurs when a firm which institutes a credit policy finds it must bear the cost of some of its customers defaulting on their obligations.

Question

Quizplus · Accepted Answer

The correct term is "Probability of nonpayment," which refers to the risk associated with customers not fulfilling their payment obligations under the credit policy. This is a direct cost to the firm as it may not recover the full value of the credit extended.

A ______________ Factor of Credit Policy Effects Occurs When a Firm