Question

Extending credit to a few qualified clients can benefit the practice because?

1) These desirable clients are likely to refer other, similarly qualified clients to the practice
2) The clinic can provide services to clients whom otherwise might be turned away, and the interest on the unpaid balance adds to practice revenues
3) Collecting part of the fees in the initial payments is better than losing the entire amount through non-payment
4) It is always best to recruit as many new clients as possible, regardless of their ability to pay

Answer 1

Extending credit to qualified clients can benefit a practice by Collecting part of the fees in the initial payments is better than losing the entire amount through non-payment (option 3)

Step-by-step explanation:

Extending credit to a few qualified clients can benefit a practice in multiple ways. Firstly, desirable clients are likely to refer other qualified clients, which can potentially expand the clientele base with low-risk borrowers. Secondly, it allows the clinic to offer services to those who might be otherwise unable to afford them upfront, with the interest on unpaid balances contributing to practice revenues. Thirdly, collecting a portion of the fees as initial payments reduces the risk of total loss from non-payment.

It's important for firms and institutions to exercise discretion when extending credit. While tools such as credit scores provide a snapshot of a borrower's financial reliability, each credit extension must be considered on its own merits and risks.

So, the answer is option 3.