Final answer:
The decision to offer credit is based on the probability of the customer's payment, including their credit history, profitability, and prevailing interest rates. Therefore correct option is B
Step-by-step explanation:
The decision to offer credit to a customer depends on the probability of payment. Factors that influence this decision include the customer's credit history, such as a record of late payments, which could indicate a lower likelihood of on-time repayment. Conversely, if the borrower is a firm with a history of high profits, they are seen as more capable of repaying the loan, making them an attractive candidate for credit.
Additionally, interest rates play a role; a loan is more valuable if interest rates in the economy have fallen. In summary, a comprehensive assessment of the borrower's reliability and the current economic conditions determine the decision to extend credit.