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AFP Certified Treasury Professional CTP Question # 262 Topic 4 Discussion

AFP Certified Treasury Professional CTP Question # 262 Topic 4 Discussion

CTP Exam Topic 4 Question 262 Discussion:
Question #: 262
Topic #: 4

ABC Company offers trade terms of 2/10 NET 30. For several reasons, ABC has decided to eliminate the requirement for a letter of credit from one of its customers. If ABC puts the customer on open book credit, what is the MOST LIKELY outcome?


A.

ABC’s credit rating will suffer.


B.

The customer’s working capital has deteriorated.


C.

ABC’s working capital is unchanged.


D.

The customer’s cost of borrowing will increase.


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