Foundations of Business (MindTap Course List)
6th Edition
ISBN: 9781337386920
Author: William M. Pride, Robert J. Hughes, Jack R. Kapoor
Publisher: Cengage Learning
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Question
Chapter 16.5C, Problem 4CC
Summary Introduction
To determine: The ways in which factoring works and the benefit factoring provide to a firm that sells its receivables.
Introduction: Factoring is a money related administration in which the business entity sells its bill receivables to an outsider at a discount with a specific end goal to raise funds.
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Explain the functioning of factoring. How does a company selling its receivables benefit?
Explain the process of factoring. What is the value of factoring to a company that sells its receivables?
In what circumstances might a large corporation sell stock rather than bonds to obtain long-term financing? In what circumstances would it sell bonds rather than stock?
Chapter 16 Solutions
Foundations of Business (MindTap Course List)
Ch. 16.1B - Prob. 1CCCh. 16.1B - Prob. 2CCCh. 16.2C - Prob. 1CCCh. 16.2C - Prob. 2CCCh. 16.3B - Prob. 1CCCh. 16.3B - Prob. 2CCCh. 16.3B - Prob. 3CCCh. 16.3B - Prob. 4CCCh. 16.4D - Prob. 1CCCh. 16.4D - Prob. 2CC
Ch. 16.4D - Prob. 3CCCh. 16.5C - Prob. 1CCCh. 16.5C - Prob. 2CCCh. 16.5C - Prob. 3CCCh. 16.5C - Prob. 4CCCh. 16.6C - Prob. 1CCCh. 16.6C - Prob. 2CCCh. 16.6C - Prob. 3CCCh. 16.7C - Prob. 1CCCh. 16.7C - Prob. 2CCCh. 16.7C - Prob. 3CCCh. 16 - Prob. 1DQCh. 16 - Prob. 2DQCh. 16 - Prob. 3DQCh. 16 - Prob. 4DQCh. 16 - Prob. 5DQCh. 16 - Prob. 6DQ
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- In practice it can be difficult to find the costs of holding stock. Why is this? How can these difficulties be overcome?arrow_forwardExplain the role of finance and the different types of jobs in finance. Identify the advantages and disadvantages of different forms of business organization.arrow_forwardDo discount cash flow methods remove market noise; that is, non-economic changes is asset, liability and equity Historic values?arrow_forward
- What is the reason why most startup firms are not qualify for a factoring scheme to earn cash?arrow_forwardWhy should the rate of return demanded by investors be different for a corporate bond and a Treasury bond?arrow_forwardExplain briefly the effect of debt and equity to the company as the main source of financearrow_forward
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