An Informal Line of Credit and a Revolving Credit Agreement

question 15

True/False

An informal line of credit and a revolving credit agreement are similar except that the line of credit creates a legal obligation for the bank and thus is a more reliable source of funds for the borrower than the revolving credit agreement.

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Definitions:

Marginal Benefits

The extra advantages or utilitarian value derived from consuming an additional unit of a product or service, highlighting consumer preferences.

Net Benefit

The total positive effects of a decision or action minus the total costs associated with it.

Crime-Control Program

Initiatives or strategies implemented to reduce the incidence of crime and increase public safety.

Cost-Benefit Analysis

A systematic approach to estimating the strengths and weaknesses of alternatives in order to determine the best option in terms of benefits and costs.