Foundations Of Finance
10th Edition
ISBN: 9780134897264
Author: KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher: Pearson,
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Question
Chapter 15, Problem 17SP
Summary Introduction
To discuss: Whether the given sources of short-term credits are secured or unsecured.
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. Accounts receivable financing is the term used to describe which of the following types of loans that involve either the assignment or the factoring of a firm's accounts receivable?
A.
Secured short-term loan
B.
Unsecured short-term loan
C.
Secured long-term loan
D.
Unsecured long-term loan
E.
Trust receipt loan
Loans backed by tangible assets are known as _____ loans.
open-end creditrevolving credit unsecuredsecured
How does getting a secured loan using accounts receivableas collateral differ from factoring?
Chapter 15 Solutions
Foundations Of Finance
Ch. 15 - Dell Computer Corporation (DELL) has long been...Ch. 15 - Prob. 2RQCh. 15 - Prob. 3RQCh. 15 - Prob. 4RQCh. 15 - Explain what is meant by the statement The use of...Ch. 15 - Prob. 6RQCh. 15 - Prob. 7RQCh. 15 - How can the formula interest = principle rate ...Ch. 15 - How can we accommodate the effects of compounding...Ch. 15 - Prob. 10RQ
Ch. 15 - Prob. 11RQCh. 15 - Prob. 12RQCh. 15 - Prob. 1SPCh. 15 - Prob. 2SPCh. 15 - Prob. 3SPCh. 15 - (Estimating the cost of bank credit) Paymaster...Ch. 15 - (Cost of short-term financing) The R. Morin...Ch. 15 - (Cost of secured short-term credit) The Marlow...Ch. 15 - (Cost of short-term financing) You plan to borrow...Ch. 15 - Prob. 8SPCh. 15 - (Cost of trade credit) Calculate the effective...Ch. 15 - (Annual percentage yield) Compute the cost of the...Ch. 15 - Prob. 11SPCh. 15 - (Cost of accounts receivable) The Michelin...Ch. 15 - (Cost of accounts receivable) The Michelin...Ch. 15 - (Cost of factoring) MDM, Inc. is considering...Ch. 15 - (Cost of factoring) A factor has agreed to lend...Ch. 15 - Prob. 16SPCh. 15 - Prob. 17SP
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Similar questions
- The receivable that is usually evidenced by a formal instrument of credit is a(n) Select one: a. trade receivable. b. accounts receivable. C. note receivable. d. income tax receivable.arrow_forwardWhich of the following is a secured loan? A - All of these are secured loans B - accounts receivable financing C- line of credit D- compensating balancearrow_forwardClassify the following items as (1) on-balance-sheet assets, (2) on-balance sheet liabilities, (3) offbalance-sheet assets, (4) off-balance-sheet liabilities, or (5) capital account. • Loan commitments. • Loan loss reserves. • Letter of credit. • Bankers acceptance. • Rediscounted bankers acceptance. • Loan sales without recourse. • Loan sales with recourse. • Forward contracts to purchase. • Forward contracts to sell. • Swaps. • Loan participations. • Securities borrowed. • Securities lent. • Loss adjustment expense account (PC insurers). • Net policy reservesarrow_forward
- A loan secured with a financial asset (eg. Accounts receivables) is a called a ___________ loan. Collateral Debenture Mortgage Notes payablearrow_forwardDiscuss how accounts receivable and inventory can be used as collateral for short term securedloan.arrow_forwardWhich of the following is money kept by the firm with a bank in low-interest or non-interest bearing accounts as part of the loan agreement? A - short-term financing B- secured loans C- compensating balance D- line of creditarrow_forward
- Matching Select the term that best fits each of the following definitions and descriptions. a. Notes receivable b. Nontrade receivables c. Net realizable value d. Direct write-off method e. Interest-bearing note f. Maturity date g. Promissory note h. Factoring receivables i. Trade discount j. Present value k. Allowance method l. Sales discount m. Negotiable note n. Non-interest-bearing note o. Assignment of receivables p. Valuation date 11. A method of recognizing the actual losses from uncollectible accounts as expenses during the period in which the receivables are determined to be uncollectible. 12. The amount of cash expected to be received from the conversion of assets in the normal course of business. 13. The sale of receivables without recourse for cash to a third party, usually a bank or other financial institution. 14. Receivables that are evidenced by…arrow_forwardWhat types of short-term credit are classified as accrued liabilities?arrow_forwardWhat is the difference between a line of credit and a short-term loan?arrow_forward
- Discuss the different types of banks deposits in respect to features, interest, cost, withdrawals, etc. and explain how deposits are relevant to credit managementarrow_forwardin the lending operation, how many types of loans security?arrow_forwardCustomer loans are classified on a Depository Institution (DI)'s balance sheet as Select one: A. liabilities, because the customer may default on the loan. B. assets, because the DI earns servicing fees on the loan. C. assets, because the DI's major asset is its client base. D. assets, because DIs originate and monitor loan portfolios. E. liabilities, because the DI must transfer funds to the borrower at the initiation of the loan.arrow_forward
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