The Purpose of the Restrictive Debt Covenant That Prohibits the Sale

question 91

Multiple Choice

The purpose of the restrictive debt covenant that prohibits the sale of accounts receivable is to ________.

• A) assure the lender that additional borrowing is constrained
• B) limit the amount of fixed-payment obligations
• C) limit the realization of current assets to cash
• D) limit the payment of annual cash dividends

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Positive Feelings

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Attractive Woman

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