Why Would a Company Sell Receivables to Another Company

question 39

Multiple Choice

Why would a company sell receivables to another company?

• A) To improve the quality of its credit granting process.
• B) To limit its legal liability.
• C) To accelerate access to amounts collected.
• D) To comply with customer agreements.

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Definitions:

Utility Function

A mathematical representation of how choices lead to different levels of happiness or satisfaction, showcasing preferences over a set of goods or outcomes.

Milk Consumption

The amount of milk drunk or used by individuals or populations over a specific period.

Endowment

The total resources available to an individual or economy, including land, labor, capital, and technology.

Price

The amount of money required to purchase a good or service, often determined by factors like supply, demand, and production cost.