Question
. Following is an excerpt from a news article titled, Switching Off Cash Supply Causes a Nasty Shock published recently by BloombergQuint .When the global
. Following is an excerpt from a news article titled, Switching Off Cash Supply Causes a Nasty Shock published recently by BloombergQuint .When the global economy went into hibernation to try to halt the spread of Covid-19, companies everywhere scrambled to get their hands-on cash. Banks, shareholders and governments were all tapped for money, but self-help played a big part too. Businesses tried to clear their inventories, to get paid quickly for their products and services, and to pay their bills more slowly. Do all those things and a company should have more funds in the bank to pay wages and other fixed costs crucial if you want to survive an economic crisis of this scale. As is so often the case, those creative types in the finance industry have come up with a smorgasbord of ways to help firms increase their cash holdings. The oldest and most common is called factoring. A. Explain the process of raising funds through the method mentioned in this excerpt. (15 marks) B. How is this method of raising funds different from the traditional method of getting bills discounted at the bank? (5 marks)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started