Why will banks permit the use of an overdraft as suitable for funding the purchase of inventory that will quickly be converted into cash?
A)To assist a company in meeting unexpected short-term cash flow problems.
B)To assist a company in exploiting short-term opportunities.
C)To assist a company through seasonal downturns in liquidity.
D)All of the given options.

Question

Quizplus · Accepted Answer

Banks may permit the use of an overdraft as suitable for funding the purchase of inventory that will quickly be converted into cash to assist a company in meeting unexpected short-term cash flow problems, to assist a company in exploiting short-term opportunities, and to assist a company through seasonal downturns in liquidity. Therefore, all of the given options are correct.

Why Will Banks Permit the Use of an Overdraft as Suitable