Typically, a Company Can Borrow What Percent of Its Accounts

question 27

Multiple Choice

Typically, a company can borrow what percent of its accounts receivable's face value if it has a good credit rating and its customers have excellent credit ratings.

• A) 15% to 25%
• B) 25% to 50%
• C) 50% to 75%
• D) 75% to 90%
• E) 90%to 100%

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Definitions:

Preferred Stock

A special type of stock whose owners, though not generally having a say in running the company, have a claim to profits before other stockholders do.

Capital Lease

A lease agreement that grants a lessee the benefits and risks of ownership of the asset, typically recognized on the balance sheet.

Balance Sheet

A “snapshot” of an organization’s financial position at a given moment.