An orange grower is most apt to use which type of financing for its crop?
A) Accounts receivable assignment
B) Blanket inventory lien
C) Trust receipt
D) Commercial paper
E) Field warehouse financing

Question

Quizplus · Accepted Answer

Field warehouse financing is a type of financing specifically designed for agricultural crops that are stored in a warehouse. The financing is secured by the crop itself and is commonly used by farmers and growers to obtain working capital for their operations. Therefore, an orange grower is most likely to use field warehouse financing to finance its crop. The other choices are not as suitable for this specific purpose. Accounts receivable assignment, for example, is typically used for financing invoices, while blanked inventory liens are more commonly used for businesses that have a wide variety of inventory types that they want to use as collateral. Trust receipts are more commonly used in the shipping industry and commercial paper is a type of short-term borrowing by corporations.

An Orange Grower Is Most Apt to Use Which Type