A principal difference between a line of credit and a revolving credit agreement is that:
A) a revolver is a legally binding commitment from the bank to lend up to a stipulated amount.
B) the borrower must pay a commitment fee on unborrowed money with a line of credit.
C) the line of credit is an informal agreement but may not be canceled due to a decline in the borrower's financial health during the relatively short period of the agreement.
D) the bank can cancel a revolver at any time if it refunds the commitment fee.
Correct Answer:
Verified
Q30: Which of the following is true regarding
Q31: Supporting working capital with long-term financing is:
A)risky,
Q32: Which of the following account changes would
Q33: Credit terms of 1/10, net 30 mean:
A)purchases
Q34: Which of the following is not associated
Q36: Which of the following is(are)true?
A)Secured lenders have
Q37: Which of the following is not a
Q38: Which of the following creates spontaneous financing?
A)Accounts
Q39: A revolving credit agreement:
A)is similar to a
Q40: The provision in short-term credit agreements that
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents