The Finance Manager Advises the CEO, "We've Got a Short-Term

question 34

Multiple Choice

The finance manager advises the CEO, "We've got a short-term cash-flow problem. We can draw on our line of credit, and the interest rate is only 2.5%. If we sell our accounts receivable, it'll cost us 3%. I recommend drawing on our line of credit." Which consideration in evaluating financing options does this illustrate?

• A) amount of financing
• B) external factors
• C) term of financing
• D) cost of financing

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Definitions:

Mnemonic Device

A method or technique, such as a pattern of letters or ideas, used to assist in remembering information.

Math Problem

A mathematical problem is a question that requires analysis, computation, or logical reasoning to find a solution.

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