Lending Institutions May Offer a Borrower a Percentage of the Value

question 103

Multiple Choice

Lending institutions may offer a borrower a percentage of the value of the borrower's accounts receivable so the borrowing firm can continue to operate while it waits to collect on its credit sales. This process is called __________

• A) establishing a line of credit.
• B) inventory valuation.
• C) pledging.
• D) revolving credit.

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Definitions:

Control Over Prices

The ability of a firm or government to dictate or influence the prices of goods and services in the market, often through regulation or monopoly power.

General Motors

An American multinational corporation headquartered in Detroit, Michigan, that designs, manufactures, markets, and distributes vehicles and vehicle parts.

Hertz

A unit of frequency equal to one cycle per second, used to measure wave frequencies, such as sound waves or electromagnetic waves.

Oligopoly

A market structure characterized by a small number of firms controlling a large portion of the market share, which gives them considerable power to set prices and influence market conditions.