An Assignment of Book Debts Is a Common Corporate Financing

question 5

Essay

An assignment of book debts is a common corporate financing method. Describe such an assignment, the two ways debts may be collected and why each may be preferred by the assignor. Further, describe the notion of crystallization as it would apply in this context.

---

Definitions:

Long Run

A time period in economic theory during which all factors of production and costs are variable, allowing for full adjustment to changes.

MR

Marginal Revenue refers to the increase in revenue that results from the sale of one additional unit of output.

Industry Entry

The process by which new competitors enter an existing market or industry.

Continue Operate

The decision for a business to keep running its operations despite facing challenges or not achieving expected results.