If a firm refuses to offer credit, the net present value of the transaction is:
A)the cash revenues received minus the cost paid in time period 0.
B)the discounted value of the revenues from time period 0.
C)the net cash flow from the future payments to be received.
D)determined by all of the above.
E)always equal to zero.

Question

Quizplus · Accepted Answer

If a firm refuses to offer credit, it means that they require payment in full at time period 0. Therefore, the net present value of the transaction would be the cash revenues received minus the cost paid in time period 0.

If a Firm Refuses to Offer Credit, the Net Present