A Firm Has a Greater Likelihood of Needing an Unexpected

question 67

True/False

A firm has a greater likelihood of needing an unexpected loan when its cash flows are relatively constant over time.

---

Definitions:

Dishonors

Refers to the failure to accept or pay a bill of exchange or promissory note when due.

Dishonored Note

A promissory note that has not been paid by the maker at maturity.

Maturity

The date on which a financial obligation or investment becomes due for payment or achieves its full value.

Note Receivable

A written promise that money will be paid by the debtor to the creditor at a certain date in the future.