Assuming that a credit decision has been analyzed and credit refused due to a negative expected profit,which of the following changes,if of sufficient magnitude,might change the decision to one of approval?
A) Increase the percentage of profit margin.
B) Decrease the probability of payment.
C) Increase the discount rate.
D) Reduce the expected profit.

Question

Quizplus · Accepted Answer

Increasing the percentage of profit margin would increase the expected profit and could potentially change the decision to one of approval. Decreasing the probability of payment, increasing the discount rate, and reducing the expected profit would all have the opposite effect and would further decrease the expected profit, making credit approval less likely.

Assuming That a Credit Decision Has Been Analyzed and Credit