What are the four credit policy variables?

Q: how can Credit Metrics Model resolve credit risk management issues

A: what is credit risk- credit risk is that the risk to default ensuing from a receiver failure to…

Q: In your own words, explain the advantages and disadvantages of credit.

A: Credit involves making the purchase of goods or availing services and paying for the transaction in…

Q: How do you compute the receivables turnover ratio?

A: Receivables turnover (RT) ratio: this is an accounting measure which shows the effectiveness of a…

Q: Give an example of a debt ratio?

A: Companies’ capital structure may contain debt and equity. It is not necessary for any company to…

Q: Why is it important to set a credit limit?

A: Solution:- Given, Credit Limit :- The term credit limit refers to the maximum amount of credit a…

Q: What is meant by credit risk analysis?

A: Risk is referred as uncertainty or loss. Financial risk is referred as the variability of actual…

Q: What are the advantages and disadvantages of implementing credit scoring within a financial…

A: The credit scoring is calculated by checking the payment history of an individual, credit mix,…

Q: What is the Relationship between the Incremental Cost and the Loan-to-Value Ratio?

A: The question is based on the concept loan to value ratio and its relationship with incremental cost.

Q: Which of the following is NOT commonly regarded as being a credit policy variable? * Collection…

A: “Since you have asked multiple question, we will solve one question for you. If you want any…

Q: What is the Effect of Loan-to-Value Ratio on Loan Cost?

A: LTV ratio tells about the maximum loan approved in terms of the value of the collateral given.

Q: what basic criteria are commonly used in evaluating credit risk?

A: Credit risk is the risk of facing a loss due to a counterpart's failure to repay the debt in part or…

Q: Describe some ways to manage credit risk at a nonfinancialcompany

A: Evaluation of the customer prior to granting credit. Nonfinancial Company does self-evaluation or…

Q: Explain the determinants of credit olicy variables. 2. Explain the hotives for the extension of the…

A: The important dimensions of a firm’s credit policy are credit standards, credit period, cash…

Q: What is market debt ratio?

A: Debt ratio: The debt ratio is a financial ratio that quantifies the degree of a corporation’s…

Q: What is the importance of Credit Rating Agency?

A: Credit Rating agencies assign the credit rating to the issuer of debt. They provide information…

Q: Develop various interest formulas for the credit calculations?

A: The interest on interest computation figures the formula of compound interest on the loaned or…

Q: Discuss the relationship between Credit View and Monetary Policy.

A: Monetary Policy:Monetary Policy is a policy that is planned and implemented by the central bank of a…

Q: What is the source of funds within Micro Credit? How does this differ from traditional sources of…

A: The process of getting cash to support company operations, acquisitions, or investments is known as…

Q: what are the strategies to improve credit

A: Credit is referred as an agreement, which are between the borrower and the lender. It might decrease…

Q: he credit qualities need to be investigated

A: Credit quality is a measurement of a human or company's creditworthiness, or the ability to repay…

Q: What is the accounting rate of return?

A:

Q: Explain mezzanine loan?

A: Mezzanine financing is a blend of both debt and equity financing. It is a way for firms to raise…

Q: Which are the fundamental relationships to know in any loan refinancing decision include at least…

A: Loan refinancing decision involves replacement of an existing debt with a new debt. The intention of…

Q: What are the advantages and disadvantages of using credit?

A: Credit is defined as the financial agreement where the borrowers receive something valuable and in…

Q: Discuss creditworthiness and its relation to the 5 C's of credit.

A: Creditworthiness is the evaluation of one company by another company to determine whether the…

Q: What are the essential differences among demand deposits, savings deposits, and time deposits?

A: Deposits refers to the sum of money that are deposited with banks or any financial institution.…

Q: What is trade credit?

A: Trade credits are advantageous for buyers because they get sufficient time for making their…

Q: How can fi nancial statement analysis be used to evaluate the credit quality of a potentialfi…

A: Whenever, an investor is considering an investment proposal, he need to analyze the various things…

Q: Define credit period

A: The purchase and sales transactions are in the form of cash or credit. If the payment is made at the…

Q: what are the principal types of credit scoring models.

A: Credit score is referred as a number range from 300 to 850 which determines the creditworthiness of…

Q: What are the five Cs of credit? How do these serve as a yardstick for creditevaluation?

A: The “5 Cs of credit” is a system used to estimate the creditworthiness of the borrowers. The 5 Cs…

Q: How is the earned income credit determined?

A: Earned income credit: Earned income credit is a refundable tax credit system designed by the federal…

Q: Define trade credit

A: Trade refers to the buying and selling of the goods and services. Trade can be between business to…

Q: Define discount period (credit)

A: Credit period:   Credit period is the maximum amount of time, expressed in days, provided by the…

Q: What are the four elements of a firm's credit policy?

A: 4 element of the firm’s credit policy are: Credit period The length of the time buyers that are…

Q: What is the Effective Rate per Payment Period?

A: Answer: The effective rate is nothing but the yearly rate under average compounding, will have…

Q: What four fundamental factors affect required rates of return(i.e., the cost of money)?

A: The minimum rate that is expected by an investor from the investment made in a project is referred…

Q: Enumerate the three (3) common credit policies

A: Credit policy refers to a set of rules based on which a company determines whom it should lend money…