Generally, Banks Lend Up to the Following Amount When Firms

question 88

Multiple Choice

Generally, banks lend up to the following amount when firms provide receivables as collateral:

• A) 50% of the value of the receivables
• B) 60% of the value of the receivables
• C) 80% of the value of the receivables
• D) 100% of the value of the receivables

---

Definitions:

Gross Profit

The financial metric representing the difference between revenue and the cost of goods sold before deducting overhead, payroll, taxation, and interest payments.

Inventory Value

The total cost or market value of all the goods and products held by a company intended for sale.

Replacement Cost

The current cost of replacing an asset with another of similar kind and same utility without considering depreciation.

Non-Cancellable

Describes a contract or agreement that cannot be terminated or annulled by either party without facing penalties.