Question

Maurio inc., a publishing house, wants to invest in digital publishing. however, the company does not possess enough capital to kick start the project. in order to gain immediate funds, maurio inc. sells its accounts of credits to restube, a financing firm, at a discount. which of the following short-term financing options is being used by maurio inc. in the given scenario?
a. factoringb.
b. trade creditc.
c. commercial paperd.
d. short-term bank loans

Answer 1

Answer:

Factoring

Explanation:

Factoring can be defined as a situation in which a company purchases a debt or invoice from another company. Factoring is also seen as a form of invoice discounting in various markets.Factoring is a very common method that can be utilized by exporters to help hasten their flow of cash.

Factoring can also be described as a form of financing that helps a lot of organizations with cash flow problems that is as a result of slow-paying clients. Factoring aids an organization in financing invoices, which leads to improvement in the company overall working capital.

Answer 2

Answer:

A) Factoring

Explanation:

Factoring: This is a short term financial option which refers to financial transactions between a business firm and a financial institution. It is the selling of debt by a business firm at a discounted price to a financial institution.

Maurio inc. is involved in factoring by selling its accounts of credits to restube which is i financing firm at a discount in order to have enough capital to invest in digital publishing.

Factoring is the relationship between the financial institution and the business firm in which the fimancial institution purchases the business firms credit and pay about 80% to 90% immediately and pay the balance at a later date.

There are different types of factoring;

1) Domestic and export factoring

2) Recourse and non-recourse factoring

3) Advance and maturity factoring

4) Disclosed and undisclosed factoring