ECONOMICS
FINANCIAL MARKETS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Finance the working capital requirements
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Meet the short term debt
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Meet the long term debt
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Pay the interest
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Detailed explanation-1: -A commercial bill is a form of bills of exchange used to finance the working capital of firms. It is a short-term, negotiable, self-liquidating instrument which is used to finance the credit sales of firms.
Detailed explanation-2: -Commercial bill is an instrument that helps companies to get advance payment for the invoices they raise after making sales to their customers. Commercial bills are issued for financing needs of the medium term. It comes into effect only after a sale has taken place.
Detailed explanation-3: -Working capital advance is provided by commercial banks in three primary ways: (i) cash credits/overdrafts, (ii) loans, and (iii) purchase / discount of bills.
Detailed explanation-4: -Working capital requirement (WCR) is the amount of money a company needs to deal with treasury gaps between its expenditures and collections. By anticipating, it will be possible to optimize working capital requirement.
Detailed explanation-5: -Trade credit/vendor credit. You may already be using this type of financing. Business credit cards. When you need money quickly, the answer to your problems could be right in your wallet. Business line of credit. Merchant cash advance financing. Invoice factoring. Invoice financing. 26-Feb-2019