All else equal, which of the following firm will be viewed most favorably by the
ID: 2733991 • Letter: A
Question
All else equal, which of the following firm will be viewed most favorably by the creditors for the sake of giving additioanl loan? (You are comparing only the firms described below among each other.)
A technology firm based on a new phone app.
A biomedical firm manufacturing specialized diabetes measuring strips exclusive to Johnson & Johnson.
A manufacturing firm making generic packing foam to many online retailers.
A clothing retailer that sells very high-end clothes, leases all of its store locations, and relies heavily on seasonal sales.
A technology firm based on a new phone app.
A biomedical firm manufacturing specialized diabetes measuring strips exclusive to Johnson & Johnson.
A manufacturing firm making generic packing foam to many online retailers.
A clothing retailer that sells very high-end clothes, leases all of its store locations, and relies heavily on seasonal sales.
Explanation / Answer
A biomedical firm manufacturing specialized diabetes measuring strips exclusive to Johnson & Johnson.
It looks like that the biomedical firm is a regular supplier of special diabetes measuring strip to Johnson and Johnson. Johnson and Johnson is a very known company and is famous for timely payment to supplier. Therefore it is less risky for the creditors to give additional loan to this biomedical company.
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