Asked by
Fandom Filmsl
on Dec 20, 2024
Verified
Under a line of credit agreement between a firm and its bank:
A) the loan often must be completely paid off for a portion of the year.
B) the firm can borrow up to a specified maximum during a specified period.
C) the bank is contractually committed to lend the firm the money.
D) a and b.
Line of Credit Agreement
A legal agreement between a financial institution and a borrower that establishes a maximum loan balance that the lender allows the borrower to access.
Specified Period
A defined duration or timeframe during which certain actions, events, or conditions are intended to take place or be in effect.
Contractually Committed
A term indicating that parties are legally obliged to carry out the terms of a contract, including payments, deliveries, or services.
- Determine and appraise the sources of short-term capital and its costs.
- Familiarize oneself with the provisions and conditions pertaining to multiple kinds of short-duration financing agreements.
Verified Answer
KL
Learning Objectives
- Determine and appraise the sources of short-term capital and its costs.
- Familiarize oneself with the provisions and conditions pertaining to multiple kinds of short-duration financing agreements.