When a Payee Wants to Get Cash Immediately for a Draft

question 427

Multiple Choice

When a payee wants to get cash immediately for a draft he can sell it to another party, but interest must be paid. This is called:

• A) reducing the draft
• B) financing the draft
• C) discounting the draft
• D) selling the draft
• E) cashing the draft

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Definitions:

Systematic Assessment

A structured approach to evaluating or analyzing a process, person, or system based on established criteria or benchmarks.

Specified Objective

A clearly defined goal or target that an individual or group aims to achieve.

Purchase-Of-Service Agreement

A contract between a funding source (like a government agency) and a service provider, where the provider agrees to offer specified services to clients for a set fee.

Contracts

Legal documents that outline the terms, conditions, rights, and responsibilities agreed upon by two or more parties.