WEEK 7 CHECKPOINT - 1 WEEK 7 CHECKPOINT SANDY EDWARDS...

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1 WEEK 7 CHECKPOINT SANDY EDWARDS FIN/200 FEBRUARY 24, 2012 JAMES BOXMA
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2 WEEK 7 CHECKPOINT Some of the main sources of short term financing are overdrafts, short-term loans, and trade credit. Here is an explanation of each of these. Overdrafts are where payments from a bank account exceed the income of the account for a temporary period. During which time the bank will finance the deficit by the means of an overdraft. This can always be arraigned rather quickly and offer a range of flexibility, this is also down with amounts that are borrowed at any time. Therefore interest is only paid on the amount that is overdrawn. The main characters of an overdraft are; Amount (should not exceed the limit, usually based on known income), Margin (interest charged at base rate plus margin on daily account overdrawn and charged quarterly. Fee may be charged for large facility), Purpose (generally to cover short-term deficits), Repayment (technically repayable on demand), Security (depends on the size of the facility), Benefits (customer has flexibility; bank has to accept
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This note was uploaded on 03/08/2012 for the course FIN 200 taught by Professor Williams during the Spring '08 term at University of Phoenix.

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WEEK 7 CHECKPOINT - 1 WEEK 7 CHECKPOINT SANDY EDWARDS...

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