Capital Rationing Implies That

question 65

Multiple Choice

Capital rationing implies that:

• A) funding resources exceed funding needs.
• B) funding needs exceed funding resources.
• C) funding needs equal funding resources.
• D) none of the above.

---

Definitions:

Line of Credit

A flexible loan from a bank or financial institution, where a borrower can access funds up to a specified limit at any time.

Lockbox System

A service provided by banks to process payments quickly by allowing companies to have their customers send payments to a special post office box.

Disbursement Float

The time lag between when a payment is issued by a payer and when the funds are actually withdrawn from the payer's account.

Receivable Accounts

Balances of money due to a company for goods or services provided that have not yet been paid by customers.