One key reason for establishing a captive finance company is the:
A)reduction of legal restrictions on the amount of debt that can be incurred.
B)increased opportunities for internal sales.
C)lower level of required financial insurance.
D)anticipated decrease in accounts receivable.
E)expected decrease in the cost of the debt required to finance receivables.

Question

Quizplus · Accepted Answer

Establishing a captive finance company can lead to a decrease in the cost of debt required to finance receivables, as it allows the parent company to have more control over financing terms and conditions, potentially leading to more favorable rates.

One Key Reason for Establishing a Captive Finance Company Is