Which One of the Following Statements Concerning Inventory Loans Is

question 299

Multiple Choice

Which one of the following statements concerning inventory loans is correct?

• A) A firm is required to hold inventory in a separate warehouse, which they are required to own under a warehouse financing arrangement.
• B) Financing for a large quantity of common items, such as small kitchen appliances, is often arranged under a trust receipt agreement with a financial institution.
• C) Financing for large ticket items, such as farm tractors, is generally done under a warehouse financing arrangement.
• D) Warehouse financing is ideally suited for inventories that improve with age such as whiskey or wine.
• E) Commercial paper is normally the preferred method of financing items such as aircraft.

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