Which of the following firms would find a factor most useful?
A)Levi Strauss,which has been shipping jeans to the same customers in 120 countries for over 40 years,
B)Brown and Root,which manages major construction projects around the world
C)RC Cola,which periodically ships a small order of soft drinks overseas
D)IBM,which exports mainframes and other expensive equipment to customers in over 100 countries around the world

Question

Quizplus · Accepted Answer

Factors are financial intermediaries that purchase receivables from companies, often to help those companies manage cash flow and credit risk more effectively. RC Cola, which periodically ships a small order of soft drinks overseas, would find a factor most useful because it likely deals with irregular and potentially unpredictable cash flows from its international customers. Factors can provide immediate cash for the receivables, which is particularly beneficial for smaller or more sporadic shipments where managing credit risk and ensuring timely payment can be more challenging.

Which of the Following Firms Would Find a Factor Most