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makkiz [27]
4 years ago
14

Why does the credit card company set the minimum payment so low

Business
1 answer:
Illusion [34]4 years ago
5 0

Answer:

To increase profit from interests by increasing duration of balance repayment.

Explanation:

The purpose of every business is to make profits and the reason why every credit card company includes a minimum payment is not just to make it easier to pay but by only making minimum payments, credit card holders could be kept as customers and paying interests on debt for longer.

Secondly, the more the periods the more likely you'll default on some of them and pay penalty fees which means additional income for the companies

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Answer:

The correct answr is C.

Explanation:

Giving the following information:

Cost Machine Hours

January $52,200 20,000

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March 57,000 22,000

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Variable cost per unit= (75,000 - 52,200) / (29,000 - 20,000)= 2.53

Fixed costs= Highest activity cost - (Variable cost per unit * HAU)

Fixed costs= 75,000 - (2.53*29,000)= 1600

Fixed costs= LAC - (Variable cost per unit* LAU)

Fixed costs= 52,200 - (2.53*20,000)= 1600

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