Which of the Following Is Least Likely to Be Correct

question 46

Multiple Choice

Which of the following is least likely to be correct about the factoring of receivables?

• A) The selling firm bears the risk of default.
• B) The higher the perceived quality of the receivables, the lower the discount rate.
• C) The discount is paid by the selling firm in the form of reduced sales price.
• D) Factoring may be the cheapest method of avoiding a cash flow problem.

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