Asked by Alier Alfonso-Ramos on May 06, 2024
Verified
A ____________, issued by a bank, promises to make a loan if certain conditions are met.
A) Bankers' acceptance.
B) Cleanup loan.
C) Letter of credit.
D) Line of credit.
E) Revolver.
Cleanup Loan
A short-term loan used to clear outstanding debts, often as a way to improve financial metrics before seeking longer-term financing.
Bankers' Acceptance
A short-term debt instrument issued by a company but guaranteed by a bank, commonly used in international trade to facilitate transactions.
Letter of Credit
A document issued by a bank guaranteeing a buyer's payment to a seller within a specific timeframe and for a specific amount.
- Recognize the assortment of short-term funding alternatives for businesses and their suitable application.
Verified Answer
Learning Objectives
- Recognize the assortment of short-term funding alternatives for businesses and their suitable application.
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