Question
Why do you think that lenders are making car loans to people with lower credit scores? What does the term default mean as it relates
Why do you think that lenders are making car loans to people with lower credit scores?
What does the term "default" mean as it relates to loans?
Assume that Ford Credit makes a car loan on a new Ford Fusion sold to a customer in 2013. Assume that this borrower defaults on the loan in 2015. When will Ford Credit recognize the bad debt expense associated with this car sale/loan? Explain.
If Ford Credit is extending credit to borrowers with lower credit scores, what would you expect to see happen to Ford Credit's allowance for bad debts balance (i.e., would it increase or decrease)? Why?
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1 Lenders may be making car loans to people with lower credit scores for several reasons One possible reason is the potential for higher interest rate...
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Foundations of Financial Management
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
10th Canadian edition
1259261018, 1259261015, 978-1259024979
