Accounts Receivable May Be Used as a Source of Financing

question 73

Multiple Choice

Accounts receivable may be used as a source of financing by

• A)pledging the receivables as loan collateral.
• B)"factoring" the receivables to a finance company.
• C)selling securities backed by the receivables.
• D)All of these options

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Definitions:

Maximize Benefits

The process of optimizing outcomes or advantages from a given set of resources or actions.

Compounded Annually

Interest that is calculated and added to the principal once every year.

Compounded Quarterly

A compound interest calculation where the frequency of compounding is every three months, affecting the overall growth of an investment or debt.

Periodic Interest Rate

The rate of interest earned in one compounding period.