Businesses, in deciding to extend credit to new customers, try to reduce defaults by:
A)determining the probability of non-payment.
B)gathering independent credit checks.
C)determining if it is profitable to extend credit.
D)All of the above.
E)None of the above.

Question

Quizplus · Accepted Answer

To reduce defaults, businesses should consider all of the options listed. By determining the probability of non-payment, businesses can assess the risk involved in extending credit. Gathering independent credit checks allows businesses to verify the creditworthiness of potential customers. Finally, businesses need to consider the profitability of extending credit to ensure that they are not taking on excessive risk.

Businesses, in Deciding to Extend Credit to New Customers, Try