Which of the Following Statements Concerning Financing the Purchase of an Existing

question 123

Multiple Choice

Which of the following statements concerning financing the purchase of an existing business is not true?

• A) The business seller usually is a good candidate for a source of financing.
• B) The deal should allow the buyer to make the loan payment out of the company's cash flow.
• C) The buyer should wait until late in the purchase process to arrange financing to avoid processing fees in case the deal falls through.
• D) All of the above

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Definitions:

Agreement

A mutual understanding or arrangement between two or more parties, often formalized by a contract.

Contractual Intent

The intention of parties to enter into a legally binding agreement, demonstrated by their words, actions, and circumstances surrounding the agreement.

Letter Of Credit

A binding document that a buyer can request from a bank to guarantee that the payment for goods will be made to the seller.

Invoice

A document issued by a seller to a buyer, listing goods or services provided, their prices, and payment terms.