A wholly owned subsidiary whose primary purpose is to finance sales of the parent company's products and services, provide wholesale financing to distributors of the parent company's products, and purchase receivables of the parent company is a
A)captive finance subsidiary.
B)factor.
C)leasing agent.
D)captive factoring agent.

Question

Quizplus · Accepted Answer

A captive finance subsidiary is specifically created by a parent company to handle financing of the products and services it sells, provide financing to its distributors, and sometimes manage the receivables of the parent company. This setup helps in controlling the financing aspect of sales and distribution, making it easier for customers and distributors to purchase products and services.

A Wholly Owned Subsidiary Whose Primary Purpose Is to Finance