What is the main advantage of Hire Purchase?

Immediate use of assets without paying the entire amount.

The total amount paid towards the asset will be higher than the cost of the asset.

The hirer cannot modify the asset till the last payment is made.

The addition of any covenants increases the cost.

What is the definition of Factoring?

An agreement in which the owner of the assets lets them on hire for regular installments paid by the hirer.

An outright purchase of credit approved accounts receivables, with the factor assuming bad debt losses.

A discount/fee which a bank takes from a seller to release funds before the credit period ends.

An arrangement whereby a financing institution assumes the credit control/protection and collection functions for its client.

Which type of factoring involves the factor having no recourse to the client when the bill remains unpaid by the customer?

Confidential and Undisclosed Factoring

What is the advantage of Bill Discounting?

It improves the current ratio and working capital management.

It helps in the creation of more houses and infrastructure facilities.

It helps in the development of rural areas and prevents migration of labor.

It boosts the construction industry and creates employment.

What tax benefits are provided in India to boost housing finance?

INR. 30,000 can be availed as tax relief for house renovation work.

Interest payment up to INR. 200,000 per year can be written off from the gross income.

Principal paid is covered under section 80C while computing the income tax.

What is the main purpose of Housing Finance?

To provide grants and loans for removing slums and creating housing colonies.

To create employment and boost industries such as cement, brick manufacturing, and electrical fittings.

To develop rural areas and prevent migration of labor to urban areas.

To encourage the construction of more houses and improve infrastructure facilities.

Which institutions provide housing finance at the international level?

Commercial banks and co-operative societies.

World Bank and Asian Development Bank.

What is the main feature of Hire Purchase?

Rental payments are paid in installments over the period of the agreement.

The hirer has the option to purchase and own the asset once all the agreed payments have been made.

The hirer cannot pledge, sell, or mortgage the assets until the last payment is made.

The frequency of the installments may be annual, half-yearly, quarterly, monthly, etc.

What is the definition of Hire Purchase?

An agreement in which the owner of the assets lets them on hire for regular installments paid by the hirer.

An outright purchase of credit approved accounts receivables, with the factor assuming bad debt losses.

A discount/fee which a bank takes from a seller to release funds before the credit period ends.

An arrangement whereby a financing institution assumes the credit control/protection and collection functions for its client.

What is the main advantage of Factoring?

Immediate use of assets without paying the entire amount.

The factor takes over the risk burden of the client.

The factor makes cash advances to the client within 24 hours.

The factor provides valuable advice on country-wise and customer-wise risks.

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