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:

Nuts

Edible seeds or fruits with a hard shell and a kernel that is eaten or used in cooking.

Berries

Small, pulpy fruits that are typically sweet or sour in taste and do not have a stone or pit, although there are exceptions.

Utility Function

A mathematical representation in economics that calculates an individual's preferred ranking of various bundles of goods, showing satisfaction levels from consumption.

Budget Constraint

A limit on the consumption bundles that a consumer can afford based on their income and the prices of goods.