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A company that extends credit to its customers should consider several factors. Which of the following would be the highest risk factor?

a. industry that the customer operates in
b.dollar amount of the transactions
c.length of time given to repay
d.repayment history

1 Answer

4 votes

Final answer:

The highest risk factor that a company should consider when extending credit to its customers is the repayment history.

Step-by-step explanation:

The highest risk factor that a company should consider when extending credit to its customers is the repayment history. If a borrower has a history of late loan payments or defaults, it suggests a higher risk of non-repayment. In such cases, the company may be less willing to extend credit or may charge higher interest rates to compensate for the increased risk.

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