FIN 300 Lecture Notes - Lecture 20: Weighted Arithmetic Mean, Net Present Value, Economic Order Quantity
Document Summary
Lo1 how firms manage their receivables and the basic components of a firm"s credit policies. Lo2 the distinct elements of the terms of sale. Lo3 the factors that influence a firm"s decision to grant credit. Lo5 the types of inventory and inventory management systems used by firms. Lo6 how to determine the costs of carrying inventory and the optimal inventory level. Answers to concepts review and critical thinking questions. 5. (lo1) a. b. c. d. e. in the future. A sight draft is a commercial draft that is payable immediately. A time draft is a commercial draft that does not require immediate payment. A bankers acceptance is when a bank guarantees the future payment of a commercial draft. A promissory note is an iou that the customer signs. A trade acceptance is when the buyer accepts the commercial draft and promises to pay it (lo2) trade credit is usually granted on an open account.
