Why would a company chose to factor its receivables,given that it will get less money than the receivables areworth?

Q: What are the factors that may influence the use of money vs credit cards?

A: There are several factors that influence someone's decision to buy goods or services through money…

Q: Which of the following is a reason that banks may favor fee compensation over balance compensation?…

A: In order to increase their deposits and use them for loan, banks usually prefer fee compensation…

Q: What is cumulative effect of changing the estimated bad debit rate

A: In accounts Bad Debt Rate or Bad Debt Ratio explains that how many debtors are likely to not pay the…

Q: What are the disadvantages of cutting expenses/costs and utilising trade credit insurance, when it…

A: Answer: Trade Credit Insurance is the methods that is applied by the company to protect its debts…

Q: We think of banks as being interest rate intermediaries. That is, the borrow cheaply, and then lend…

A: Following are the types of risk faces by banking industry other than interest rate:

Q: How does commercial paper differ from a bank loan? Why is the interest rate often less for…

A: Commercial PaperCommercial paper is promissory notes that represent loans issued by the companies.…

Q: f a bank's credit ratings decrease, How does this affect borrowers, lenders, and financial…

A: Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: Is capital rationing always a bad thing? Explain

A: Capital rationing: Capital rationing is restriction bestowed upon new investments in the…

Q: What is the key advantage of using electronic payments instead of currency or checks?   A. Lower…

A: Opportunity costs refers to the benefits that are foregone when a firm implements any project.

Q: Why do you think banks are willing to offer savers higher rates of return if they agree to less…

A: Savers are those persons who deposit money in various deposit accounts for the purpose of earning…

Q: Which of the following method is used by the companies to finance their receivables from slow paying…

A: There are various short term sources of finance

Q: How is the receivables turnover ratio measured? What does this ratio indicate? Is a higher or lower…

A: Receivables turnover ratio is measured by dividing net credit sales of a period by average accounts…

Q: What is a question that should be asked about accounts payable when forecasting? a.) What are the…

A: Accounts payable mirrors the obligation of a business to the leasers or providers, if there should…

Q: he purpose of the inflation premium is to maintain the purchasing power of money while it is loaned…

A: a) An inflation premium is added to interest rates for compensating for expected inflation by…

Q: Its difficult for payments bank to survive in long run ?

A: Payment banks- Meaning Carry out most of the banking operations but are not allowed to provide loans…

Q: Why would a corporation want to factor its receivables if it would only receive a fraction of the…

A: Introduction: Factoring is nothing more than discounting bills receivables before the due date to a…

Q: Why will bank never opt for the rejection of payment of LC to exporters bank?

A: A Letter of Credit or Credit Letter refers to a assurance letter given by the bank to its buyer that…

Q: posit multiplier and money multiplier ? Explain.

A: Deposit Expansion Multiplier System The deposit expansion multiplier is also known as Deposit…

Q: What would be the type of the quantity used in the break even analysis for Banks? Ex: Number of…

A: BREAK EVEN POINT

Q: Debt-deflation leads to lower income because: O falling prices redistribute income from debtors to…

A: Debt deflation is an economic theory. It occurs when fall in prices leads to increase of debt burden…

Q: Why is the Fed’s discount window considered the “lender of last resort” for some banks?

A: The “discount window” refers to the facilities that central banks are offering to commercial banks…

Q: What would be a sign of a shortage in financial markets?

A: The financial market refers to the market in which people trade financial securities like bonds,…

Q: What is the traditional cash equivalency approach used to determine how below-market-rate loans…

A: Introduction: The given question is related to the concept of real estate finance and investments.…

Q: Why is it that oftentimes banks refuse to lend to many borrowers even though they offer high…

A: Analysis of the given option: i) To reduce the exposure to diversification risk Remark-By…

Q: A change in money demand or a shift in the money demand curve is caused by a change in * the…

A: the increase demand of money shift the demand curve up.

Q: Based on your understanding of the fAactors that affect the cost of money, Identify which of the…

A: Higher inflation rate would lead to higher interest or nominal rate on the borrowed amount. This is…

Q: the financial institution do to lower these risks

A: The main risk is that interest rates will rise. Therefore, banks have to pay  higher interest rates…

Q: How does the cost of costly trade credit generally compare with the cost of shorttermbank loans?

A: Trade credit is that the quantity businesses owe to their suppliers on inventory, products, and…

Q: Question  If the % of uncollectible accounts does not change, there cannot be a savings for this…

A: Bad Debt and Allowance for Bad debt: When a customer is unable to pay the amount due, the amount…

Q: Why have banks been losing income advantages ontheir assets in recent years?

A: The growth of the cash equivalent market and bond certificate market implies that firms aren't any…