You are viewing a graph which compares costs with the amount of credit extended.Both the carrying costs and the opportunity costs of credit are depicted.What is the function called that represents the summation of these carrying and opportunity costs?
A)opportunity cost curve
B)credit extension curve
C)credit cost curve
D)terms of sale graph
E)optimal sales graph

Question

Quizplus · Accepted Answer

The function that represents the summation of carrying and opportunity costs is commonly referred to as a credit cost curve. This curve shows the total cost of extending credit for a given level of credit extended, taking into account both the direct costs of financing the credit and the opportunity cost of not receiving payment immediately. The other answer choices (A, B, D, E) do not accurately describe the function depicted in the graph.

You Are Viewing a Graph Which Compares Costs with the Amount