What Is the Risk in Using a Bank Overdraft as a Source

Multiple Choice

What is the risk in using a bank overdraft as a source of financing?

A) The company's indebtedness will grow beyond its ability to handle it.
B) Its cost exceeds that of the company's weighted average cost of capital.
C) It will negatively impact the credit rating of the company.
D) Interest costs cannot be deducted from income taxes.
E) It may have to be paid in full with little prior notice.