An ice cream vendor signs a franchising agreement with the distributor.Under the agreement the distributor agrees to provide ice cream stock with a 10% discount on payment within 30 days, and a 20% discount on payment within 10 days.The distributor allows the operator 90 days to pay for the ice cream stock in full.The above serves as an example of:
A)debt financing.
B)capital budgeting.
C)equity financing.
D)trade credit.
E)loan fronting.

Question

Quizplus · Accepted Answer

The scenario describes trade credit, which is a type of financing where the seller extends credit to the buyer to purchase goods or services, often with terms for early payment discounts.

An Ice Cream Vendor Signs a Franchising Agreement with the Distributor.Under