Which of the following sources of short-term financing is likely to have the highest interest rate?
A) accounts receivable loan (pledging of accounts receivable)
B) line of credit
C) line of credit with a compensating balance
D) commercial paper

Question

Quizplus · Accepted Answer

Accounts receivable loans (pledging of accounts receivable) typically have the highest interest rates among the options given. This is because they are often considered riskier by lenders due to the reliance on the borrower's customers paying their invoices on time.

Which of the Following Sources of Short-Term Financing Is Likely