Which of the Following Statements Is Incorrect

question 14

Multiple Choice

Which of the following statements is incorrect?

• A)A captive finance subsidiary's purpose is to finance sales of the parent company's products and services.
• B)An operating agreement between the parent and the captive specifies the type of receivables that qualify for same and specific services provided by the parent.
• C)A captive can be used to finance distributor or dealer inventories until a sale occurs.
• D)A captive is rarely used to finance products leased to others.

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Definitions:

Intermittently

Occurring at irregular intervals; not continuous or steady.

Punishment

The imposition of a penalty or deprivation for wrongdoing, used as a method of discouraging undesirable behavior.

Effectiveness

The degree to which something achieves its intended outcome or results in a desired effect or impact.

Unpleasant Stimulus

A negative or harmful stimulus that causes discomfort or aversion.