PRIN.OF CORPORATE FINANCE
13th Edition
ISBN: 9781260013900
Author: BREALEY
Publisher: RENT MCG
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Chapter 30, Problem 19PS
a)
Summary Introduction
To determine: Expected benefit by making a credit check.
b)
Summary Introduction
To determine: Reason or circumstances that person X has bother to undertake a credit check.
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Students have asked these similar questions
If you were a wise credit card user, under which of the following conditions would you consider using a credit card to finance an expensive purchase?
a. If I haven't reached my credit limit and I really want to item
b.If I believe my money situation will be better (for example, a better-paying job) in the future than it is now.
c.If I have the money to pay for the item in my bank account and plan to immediately pay the balance in full.
d. If my card has good rewards on it.
A friend owns a business that extends credit to its customers. The friend has asked you to helps with estimating uncollectible accounts and wants you to make a recommendation. Specifically, your friend is asking:
Which of the two methods of estimating uncollectible provides for the most accurate estimate of the current net realizable value of the receivables?
Obtaining credit begins with you. After you complete a credit application, the lender decides if you
are a good risk.
Agencies that collect credit information about individuals are called credit bureaus. For a fee,
they provide information about you that lenders need to decide if you are a good risk. The
information you provide on your application is checked against the information the credit bureaus
have collected about you.
Why is your credit application approved or denied?
DENIED
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SORRY!
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Physical appearance
Character
Political affiliation
Marital status
Capacity
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Bad news-your credit application was denied. What are the major factors about you that the
lender used to evaluate your creditworthiness? Check all that apply.
Select reasons why you were probably turned down for credit. Check all that apply.
Large amount of available credit relative to income
False or misleading information on your application…
Chapter 30 Solutions
PRIN.OF CORPORATE FINANCE
Ch. 30 - Prob. 1PSCh. 30 - Components of working capital True or false? a....Ch. 30 - Inventory True or false? a. Just-in-time inventory...Ch. 30 - Inventory What are the trade-offs involved in the...Ch. 30 - Prob. 5PSCh. 30 - Prob. 6PSCh. 30 - Prob. 7PSCh. 30 - Prob. 8PSCh. 30 - Prob. 9PSCh. 30 - Credit terms Phoenix Lambert currently sells its...
Ch. 30 - Prob. 11PSCh. 30 - Prob. 12PSCh. 30 - Prob. 13PSCh. 30 - Prob. 14PSCh. 30 - Prob. 15PSCh. 30 - Credit policy How should your willingness to grant...Ch. 30 - Prob. 17PSCh. 30 - Prob. 18PSCh. 30 - Prob. 19PSCh. 30 - Prob. 20PSCh. 30 - Cash management Complete the passage that follows...Ch. 30 - Prob. 22PSCh. 30 - Prob. 23PSCh. 30 - Prob. 24PSCh. 30 - Prob. 25PSCh. 30 - Prob. 26PSCh. 30 - Prob. 27PSCh. 30 - Prob. 28PSCh. 30 - Prob. 29PSCh. 30 - Prob. 30PSCh. 30 - Prob. 31PSCh. 30 - Prob. 32PSCh. 30 - Prob. 34PSCh. 30 - Prob. 35PSCh. 30 - Prob. 36PSCh. 30 - After-tax yields Suppose you are a wealthy...Ch. 30 - Prob. 38PSCh. 30 - Prob. 39PS
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Similar questions
- Please contemplate the following scenarios and answer accordingly.a. Islamic banking has entered into Murabaha transaction with Mr. Daghabaaz. Mr. Daghabaaz defaulted on payments of installment later and IB charged accordingly provision as per the aging of receivable. However, Mr. Daghabaaz contacted bank to request a rollover on said transaction to avoid blacklisting.Requirement: As an Islamic Banker, do you think IB can charge any penalty for late payment to Daghabaaz and grant rollover facility.arrow_forwardWhat if she had made the purchase with her credit card and paid off her bill in full promptly? Assume the credit card has a grace period.?arrow_forwardIf a consumer with a relatively low credit score applied for a loan from your bank, what other criteria might you consider before deciding to grant a loan?arrow_forward
- Obtaining credit begins with you. After you complete a credit application, the lender decides if you are a good risk. Agencies that collect credit information about individuals are called credit bureaus. For a fee, they provide information about you that lenders need to decide if you are a good risk. The information you provide on your application is checked against the information the credit bureaus have collected about you. Why is your credit application approved or denied? ооооо Good news-your credit application was approved. What are the major factors about you that the lender used to evaluate your creditworthiness? Check all that apply. оооо APPROVED Physical appearance Character Political affiliation Capacity Religion 0000 MEGACREDIT Capital Extra 199 SIE TEL Your friend recently applied for credit and was turned down. Why was your friend probably denied credit? Check all that apply. History of personal bankruptcy FICO score greater than 850 Absence of checking, savings, or other…arrow_forwardSuppose you go to your local bank, intending to buya certificate of deposit with your savings. Explain whyyou would prefer this to offering a loan, at an interestrate that is higher than the rate the bank pays oncertificates of deposit (but lower than the rate the bankcharges for car loans), to the next individual who entersthe bank and applies for a car loanarrow_forwardWhich of the following would result in a soft credit inquiry? mortgage loan application O background check for employment credit card application car loan applicationarrow_forward
- . if you are unable to pay your credit card bills what can you do?arrow_forwardYour company provides credit to customers. Someof these customers default on their loans, with verynegative implications for you. Describe how you coulduse discriminant analysis to learn what distinguishesthe customers who default on their loans from thosewho pay back their loans. How might you use such amodel?arrow_forwardWhich of the following credit checks would be considered a soft check? A. Vehicle loan application B. job application C. student loan application D. Credit card application I don't need explanation just the answer :)arrow_forward
- Your friend is trying to establish good credit. Your friend is thinking about taking out a $15,000 auto loan to establish some credit on his credit report. Do you think this is a good idea for your friend to do this? Do you have an alternate suggestion? Why?arrow_forwardSuppose Mr. Ahmad and Mr. Akram are the current and saving account holders in an Islamic bank, respectively. Mr. Ahmad andMr. Akram have made payments to their vendors against credit sale through checks and they also made a gratuitous payment totheir relatives through checks separately. Please answer following considering scenario:II. Explain whether the transactions made by Mr. Ahmad and Mr. Akram are based on Hawalah. Please also specify theform of Hawalah in each situation, if any.arrow_forwardAll credit cards are not alike, nor are all spenders alike. When you are deciding which credit card to obtain, your first step should be to honestly determine what kind of spender you are and how you pay your bills. Then consider cards whose features best match your purchasing and payment habits. These cards will work to your greatest advantage. Consider the following example: Shop Around for the Best Deal Larry is shopping around for a credit card and does not expect to pay the balance in full each month. Larry isn't a big spender and will carry small balances from month to month. What is Larry's best option? O Pay an annual fee to keep the interest rate as low as possible Select the card with the longest grace period regardless of its annual fee or interest rate Avoid cards with annual fees, and get one with as low an interest rate as possiblearrow_forward
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