Credit evaluation helps to judge the credit worthiness of a prospective customer. Credit granting decision is a procedure of final decision whether to grant credit to the prospective customer or not. The decision to grant credit or not depends upon the (cost benefit analysis. The manager can form a subjective opinion based on credit evaluation about the chance of getting payment and the chance of not getting payment. The relative chances of getting the payment or not getting the payment are at the back of his mind while taking such a decision.
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