Which of the Following Statements Is False

Multiple Choice

Which of the following statements is false?

A) By extending credit, a firm typically increases its cash flow through increased gross profits.
B) A cash discount is typically intended to be an incentive to pay early.
C) All else the same, firms with higher markups will tend to have more flexible credit terms.
D) Whenever credit is extended to a new customer who would not otherwise pay cash, the amount the seller has at risk is the price the customer pays.
E) The carrying costs associated with granting credit will increase as credit policies are relaxed.