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an agreed or prearranged overdraft is a very ____ form of external finance.

an agreed or prearranged overdraft is a very ____ form of external finance.

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An agreed or prearranged overdraft is a very flexible form of external finance.

This is because the quantum of utilization of overdraft need not be fixed and the amount that can be overdrawn will depend on the requirement of the business. As such the interest rate charged is also variable in nature.

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