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Discuss the Statement,"The Contingency Approach Is Just Common Sense

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Essay

Discuss the statement,"The contingency approach is just common sense." Is this ? Why or why not? Why is this important for managers?


Definitions:

Factoring

Financing method where a firm sells its accounts receivables, usually to a specialized financing company, at a discount to their full value.

Receivables

Payments due from clients to a business for the delivery of goods or services that have not yet been compensated.

Collateral

An asset or property that a borrower offers to a lender as security for a loan, which the lender can seize if the borrower fails to make required payments.

Installment Loan

A loan that is repaid over time with a set number of scheduled payments.

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