What Is "Recourse" as It Relates to Selling Receivables

question 141

Multiple Choice

What is "recourse" as it relates to selling receivables?

• A) The obligation of the seller of the receivables to pay the purchaser in case the debtor fails to pay.
• B) The obligation of the purchaser of the receivables to pay the seller in case the debtor fails to pay
• C) The obligation of the seller of the receivables to pay the purchaser in case the debtor returns the product related to the sale.
• D) The obligation of the purchaser of the receivables to pay the seller if all of the receivables are collected.

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Definitions:

Discount Rate

It’s the rate used in discounted cash flow analysis for calculating the present worth of cash flows expected in the future.

Package Deal

A bundled offer where multiple products or services are sold together, often at a discounted price compared to purchasing each item separately.

Cost

An amount that must be paid or spent to buy or obtain something, reflecting the expense associated with acquiring or maintaining an asset.

Compounded Annual Rate

The Compounded Annual Growth Rate (CAGR) measures the annual growth rate of an investment over a specified time period, taking into account the effect of compounding.