Kenneth Wants to Start a New Business

question 77

Multiple Choice

Kenneth wants to start a new business. To get start-up capital, he takes a short-term loan from a bank. The bank agrees to provide him the agreed-upon funds as per a legally binding commitment. However, the bank requires Kenneth to pay interest on any fund he borrows and a commitment fee based on the unused amount of funds. Which of the following short-term financing sources does Kenneth utilize to fund his business in the given scenario?

• A) Factoring
• B) Commercial paper
• C) Trade credit
• D) Revolving credit agreement

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