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A large, listed company in the food and household goods industry needs to raise $50 million for a period of up to 6 months.
It has an excellent credit rating and there is almost no risk of the company defaulting on the borrowings. The company already has a commercial paper programme in place and has a good relationship with its bank.
Which of the following is likely to be the most cost effective method of borrowing the money?
Suggested Answer: D
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8 comments · newest first
KA
Kaitlyn
1 year ago
Surprised they don’t just use the overdraft!
RO
Royal
1 year ago
A term loan would be more expensive, no doubt.
MA
Mayra
1 year ago
Really? I thought treasury bills were safer.
TA
Tamekia
1 year ago
I agree, low cost and quick access!
OL
Olga
1 year ago
Commercial paper seems like the best option here.
VE
Velda
1 year ago
Hmm, I'm not totally sure about this one. I'll have to think it through carefully.
AR
Artie
1 year ago
I remember that the resource-based view focuses on internal strengths, right? I think it's about leveraging unique assets for competitive advantage.
MI
Mitzie
1 year ago
I think the key here is the latency between the data centers. With 20ms of latency, that's going to introduce a lot of delay in streaming the vDisk, so option A seems like the most relevant reason.