A ______________ factor of credit policy effects occurs when a firm that institutes changes in its existing credit policy finds that, as a result, some of its customers choose to pay early to take advantage of the new terms.

A) Cost.
B) Cost of debt.
C) Revenue.
D) Probability of nonpayment.
E) Cash discount.

Credit Policy Effects

The impact of a company's credit policy on its operations, including effects on sales volume, customer relationships, and cash flow.

Cost Factor

A multiplier or rate that helps in estimating the cost of a project, task, or operation based on certain parameters or variables.

Cash Discount

A reduction in the invoice price offered to buyers as an incentive for early payment.