Tunebeak, a fast food service chain, wants to introduce a new product. However, it lacks the financial support required to promote its product. Therefore, it sells its accounts receivables from its customers to a financing firm and is able to invest in the promotion of its product. Which of the following short-term financing options is being used by Tunebeak in the given scenario?
A) Commercial paper
B) Factoring
C) Short-term bank loans
D) Trade credit

Question

Quizplus · Accepted Answer

Factoring is the process of selling accounts receivables to a third party to obtain immediate cash, which is what Tunebeak is doing.

Tunebeak, a Fast Food Service Chain, Wants to Introduce a New