The primary advantage that pledging accounts receivable providesis:a.

QUESTION

The primary advantage that pledging accounts receivable providesis:a. the flexibility it gives to the borrowerb. that the financial institution bears the risk of collectionc. the low cost as compared with other sources of short-termfinancingd. that the financial institution services the accounts
UnderPledging, the borrower simply offers his accounts receivable ascollateral for a loan obtained from either a commercial bank orfinance company. The amount of the loan is stated as apercent of the face value of receivables pledged. ThePrimary

ge of Pledging as a source of Short-termFinancing relates to the flexibility it provides theborrower. Thus, Answer is Option (a) The Flixibility it gives tothe borrower

ANSWER:

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