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A firm sells its accounts receivable outright at a discount to raise money quickly. This is:
AFormatting
BFactoring
CFranchising
DForecasting
Answer & Solution
Correct answer: B. Factoring
1. The receivables leave the firm's books.
2. The buyer is called a factor.
3. This is factoring.
_Source: OpenStax Introduction to Business, Chapter 16, Understanding Financial Management and Securities Markets._
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