What Type of Financing Agreement Would Contain Conditions Relating to the Provision

question 22

Multiple Choice

What type of financing agreement would contain conditions relating to the provision of,among other things,an invoice,shipping receipt,and proof of insurance?

• A) collateral security agreement
• B) letter of credit
• C) blanket security agreement
• D) letter of commitment

---

Definitions:

Present Value

The contemporary financial worth of a future sum or ongoing cash flows, evaluated at a designated rate of return.

Compounded Annually

A method of calculating interest where the interest earned each year is added to the principal, and the interest for the next year is calculated on the total amount.

Unamortized Discount

The portion of a bond discount that has not yet been charged to expense because the bond has not reached its maturity.

Times Interest Earned Ratio

A financial ratio that measures a company's ability to meet its debt obligations by comparing its income before interest and taxes (EBIT) to its interest expenses.