Credit, Debt, and Finance

Pricing decisions are influenced by various factors including discounts, credit periods, and the specific conditions attached to those credit terms.

It is right of the surety. When he makes payment to the creditor on behalf of principal debtor then he becomes invested with all the rights which the creditor had against the principal debtor.

 A holder in due course is one, who acquires a bill of exchange in good faith, for value, and before date of maturity. The holder acquires a good title ,even if the title of the transferor, is defective. Suppose B acquires a bill of exchange from A by duping him. B then passes on the bill to C. C is a holder in due course, as he is not aware of what B did to get the bill. C is entitled to receive the payment , and A has no claim against C.

 It is a major disadvantage of accommodation bill. As accommodation bills are drawn in absence of any consideration, it is not a proof of debt. It is not easy to maintain a suit for recovery of the amount. In trade bills, legal action can be take easily, if the bill is dishonoured.

From the information available in passage the following line “yet the high rate of repayment is the best evidence of affordability” gives us clue to answer this question that high rate of interest charge by NGO is justified. Thus correct option (3). The rate being exploitative is contention used by leftist against NGO’s. Thus correct answer is option (3).

The last para begins with the phrase “A better alternative will be”. The suggestion to which this alternative is offered is contained in the last lines of the preceding para “forgiveness of the debt”.

Float refers to the time delay between the issuance of a cheque and the actual availability of funds in the recipient's account, not just the collection time.

A firm can absolutely have a strict credit policy even if demand is high, as this helps ensure timely cash inflows and reduces bad debt risk.

A longer credit period increases the risk of default and ties up capital, making recovery less certain, not more.

Receivables management is indeed a balance between the costs of carrying credit and the potential loss of sales from being too restrictive.

 Bridge finance is to bridge the gap between the current requirement and the availability of funds.

Solvency refers to the ability of a company to meet its long-term financial obligations, including interest payments and the repayment of principal on long-term debt.

Subprime lending refers to the practice of lending to borrowers with poor credit histories or high risk profiles, who would not qualify for conventional loans.