Question 35 (10 points) Select all that are correct. A typical asset based revol

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Question 35 (10 points) Select all that are correct. A typical asset based revolving line of credit includes an amount equal to "eligible receivables, as defined, multiplied by a predetermined advance rate % includes an amount equal to "eligible inventory, as defined, mutipied by a predetermined advance rate % includes, at times, other assets such as trademarks or real estate at appraised value, multiplied by a predetermined advance rate Is more dificult for the borrower to manage if reporting is monthly instead of daily generally includes a provision to "lockbox" receivables which means collections are kept in a safe on-site until picked up by the a courrier. may exclude accounts receivable credit balances will increase the otherwise computed borrowing base is subject to a ceiling which limits the maximum amount borrowed even if the borrowing base calculation supports additional borrowing can be used only by manufacturing frms and is of no use to professional service firms like civil engineering, architectural and electrical engineering frms may tie up collateral well in excess of the maximum which can be borrowed under the loan normally includes receivables from foreign customers normally excludes Work-In-Process inventory typically defines eligible receivables on factors including aging and concentration

Explanation / Answer

> includes an amount equal to "eligible receivables", as defined, multiplied by a predetermined advance rate 9%

> includes an amount equal to 'eligible inventory. as defined. multipied by a predetermined advance rate %

> includes, at times, other assets such as trademarks or real estate at appraised value, multiplied by a predetermined advance rate

> is subject to a ceiliing which limits the MAXIMUM amount borrowed even if the borrowing base calculation supports additional borrowing

> normally excludes Work in-Process inventory

> typically defines eligible receivables on factors including aging and concentration

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