Acme Finance Company approaches merchants and gives immediate cash to them in return for the right to collect the series of monthly payments made on account by the merchant's customers.Acme pays $75 now for the assignment of right to collect $100 in the future.For good reason,Acme should be examining the business practices of the merchants from whom it accepts assignments as much as it examines the creditworthiness of the accounts that it purchases.

Question

Quizplus · Accepted Answer

Since Acme is dependent on the merchants' customers for their payments, it is important to examine the merchants' business practices to ensure that their customers will continue to make payments on the accounts. This will help to minimize the risk of default and ensure the profitability of the investment.

Acme Finance Company Approaches Merchants and Gives Immediate Cash to Them