1. Which of the following strategies should a cash-strapped firm adopt if the effective interest rate charged on trade credit is lower than the bank's interest rate?

A) Take the discount but pay after the discount period.

B) Ignore the discount, pay at the end of the period.

C) Borrow from the bank and take the discount.

D) Take the discount and hope for longer payment float.

2. A budget request that includes funding for a food service contract that runs from July of one fiscal year to June of the following fiscal year is most likely making use of this type of funding policy exception:

A) Working Capital Funds

B) Advance procurement

C) Services contract crossing fiscal years

D) Multiyear procurement