Receivables may be sold because they may be the only reasonable source of cash.

Name: Receivables may be sold because they may be the only reasonable source of cash.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

If a company needs immediate cash and cannot obtain it through other means such as borrowing or equity financing, selling receivables may be the best option. This is because the receivables represent future cash inflows that the company can convert into cash by selling them to a third party.

Receivables May Be Sold Because They May Be the Only