A Committed Line of Credit

question 99

Multiple Choice

A committed line of credit:

• A)guarantees that a set amount of funds will be available to a firm for a stated period of time regardless of events that might occur during that time period.
• B)is a guarantee that a bank will purchase a firm's accounts receivable at full value.
• C)provides greater assurance than a noncommitted credit line that funds will be available when needed by a firm.
• D)guarantees that any funds borrowed during a stated period of time will be charged the lowest rate of interest the lending bank offers to any of its customers.
• E)is a loan arrangement for a stated period of time which is free of all costs and fees other than the actual interest paid on the funds borrowed.

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Definitions:

Control and Coordination

The process of managing and integrating activities to ensure that organizational goals are efficiently achieved.

Network Complexity

The intricacy and interconnectedness of components within a network, reflecting its diversity, number of nodes, connections, and the degree of their interactions.

Outsourced Activities

Tasks or operations handed over to external entities or companies to capitalize on efficiencies or specialized skills not available internally.

Lack of Loyalty

Refers to the absence of allegiance, commitment, or fidelity in relationships, such as between an employee and employer.