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Chap11_2009 - Chapter 11 Short-Term Financing Learning...

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Chapter 11 Short-Term Financing
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Learning Objectives After studying Chapter 11, you should be able to: Understand the sources and types of spontaneous financing. Calculate the annual cost of trade credit when trade discounts are forgone. Explain what is meant by "stretching payables" and understand its potential drawbacks. Describe various types of negotiated (or external) short- term borrowing. Calculate the effective annual interest rate on short-term borrowing with or without a compensating balance requirement and/or a commitment fee. Understand what is meant by factoring accounts receivable.
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