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A Line of Credit Can Be Either a Formal or an Informal

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A line of credit can be either a formal or an informal agreement between a borrower and a bank regarding the maximum amount of credit the bank will extend to the borrower during some future period, assuming the borrower maintains its financial strength.


Definitions:

Optimal Solution

The best achievable outcome or decision among a set of alternatives that maximizes or minimizes the desired objective.

Scarce Resources

Resources that are limited in availability and cannot meet all demands of production or consumption at the same time.

Shadow Price

In economic theory, the value of an additional unit of a constrained resource, or the opportunity cost of not having that additional resource available.

Assembly Time

The total time required to put together various components of a product into its final form.

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