Explain Future Advances?

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 12Q: What is future value and what is one example where it might be used?
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Explain Future Advances?

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Step 1

Future advance:

A future advance could be a clause in a contract that permits for extra reserves accessible beneath the credit understanding.

Step 2

In case a potential development clause is included in a credit assertion at that point the borrower will depend on getting stores from the bank beneath the terms of the contract without having to secure another credit for extra reserves.

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