Bank Lines of Credit Must Be Judiciously Requested Because the Lines

question 53

Multiple Choice

Bank lines of credit must be judiciously requested because the lines often:

• A) accrue interest regardless of whether funds are borrowed.
• B) require payment of a commitment fee to establish.
• C) appear as a liability on the firm's balance sheet.
• D) have a negative impact on the firm's credit history.

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Definitions:

Lifetime Guarantee

A promise made by a manufacturer or seller that a product will be repaired or replaced if it fails or malfunctions for the entire life span of the purchaser, under certain conditions.

Anticipation And Preparation

The processes of looking forward to potential events and making ready or preparing for them.

Potential Crises

Refers to situations or events that have the capacity to lead to an emergency or a critical condition, requiring immediate attention to prevent or mitigate disaster.

Unforeseeable

Impossible to predict or anticipate due to lack of information or inherent unpredictability.