Question

From the perspective of repayment source and timeframe, which of the following statements accurately distinguishes a Working Capital (W

Q: Answer-From the perspective of repayment source and timeframe, which of the following statements accurately...

A bank providing working capital credit wants to recover its funds within a short period out of the sale proceeds of current assets. Conversely, a Term Loan is repayable over a longer time span out of the cash generation from operations.

C credit from a Term Loan (T
L ?

A A WC loan is repaid out of long-term equity issues, whereas a Term Loan is repaid via short-term invoice discounting.

B A WC loan requires a mandatory holiday period (moratorium), while a Term Loan must be recovered within one month.

C A WC loan is supposed to be repaid out of the sale proceeds of current assets within a short period, whereas a Term Loan is repaid out of cash generation from operations over a longer time span.

D A WC loan is secured only against capital machinery, whereas a Term Loan requires no primary security.

E A WC loan is cleared through institutional equity dilutions, whereas a Term Loan is cleared through short-term trade credit lines.

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From the perspective of repayment source and timeframe, which of the following statements accurately distinguishes a Working Capital (W

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