Which two of the following are the key elements in determining whether or not a switch from a no-credit policy to a credit policy is advisable?

55.

A just-in-time inventory system: I. when implemented properly reduces the cost of inventory to zero. II. increases the inventory turnover rate. III. is sufficient to handle immediate production needs. IV. minimizes the costs of holding inventory.    A.  I and III only B.  II and IV only C.  I, II, and IV only D.  II, III, and IV only E.  I, II, III, and IV Refer to section 20.8

56.	The incremental investment in receivables under the accounts receivable approach is equal to:    A.  P - vQ′. B.  PQ′. C.  PQ + v(Q′ - Q). D.  P(Q′ - Q). E.  PQ(Q′ - Q). Refer to section 20.A

57.

The accounts receivable approach to credit policy supports the theory that:    A.  a firm's risk of offering credit to a new customer is limited to the variable cost of the sold items. B.  the best credit policy is an all-cash policy. C.  the cost of offering credit to a new customer is the same as the cost of offering credit to an existing customer. D.  foregoing cash discounts is a method of obtaining inexpensive short-term financing. E.  the default risk of a credit policy is the same as the default risk under an all cash-policy if your customers remain the same. Refer to section 20.A

58.

Which two of the following are the key elements in determining whether or not a switch from a no-credit policy to a credit policy is advisable? I. variable cost per unit II. cash discount percentage III. credit price IV. default rate    A.  I and III only B.  II and IV only C.  II and III only D.  I and IV only E.  III and IV only Refer to section 20.A