Question

Which of the following best describes the advantages

Q: Answer-Which of the following best describes the advantages and risks of using trade credit for managing wo...

Trade credit helps MSMEs manage working capital by delaying payments to suppliers. While beneficial for short-term liquidity , excessive reliance can strain relationships and result in higher costs .

and risks of using trade credit for managing working capital in MSMEs?

A Trade credit allows MSMEs to delay payments, improving liquidity, but overuse can strain supplier relationships and increase costs.

B Trade credit requires MSMEs to make advance payments, improving creditworthiness but adding to upfront expenses

C Trade credit is a form of equity financing where suppliers take ownership stakes in MSMEs.

D Trade credit is available only to large enterprises with established supplier relationships

E Trade credit provides immediate cash to MSMEs, secured by personal guarantees.

Practice Next

More Financial Management Questions

Ramsar sites in North-East India is:
The “Repeating Unit” of glycogen is:
A food must contain less than ___ grams of fat per serving to be considered a low-fat food:
Deficiency of iron causes
Which of the following methods is a quick test for sugar content during the early stages of the brewing process for beer?
M.S. Swaminathan was an Indian:
Mark the correct statement with regard to spices and essential oils:

a. Cinnamon is the bark of a tree

b. Cardamom is a d...
Which of the following RF frequency related to Industrial use
This is produced by yeast fermentation of carbohydrates under anaerobic conditions:
Residues of pesticides, heavy metals and antibiotics in food affect

Which of the following best describes the advantages

Solution