Negotiable Instruments

Negotiable instruments are among the most common tools for financial transactions. Whether a check, a draft, a promissory note, or a certificate of deposit, negotiable instruments allow for business transactions to occur more smoothly, while legally protecting the parties involved.

Using the information presented in the scenario below respond to the following in a 1- to 2-page paper:

Mary has started a company that will provide computer hardware and software for processing orders for companies who sell moderately high volumes of merchandise over the Internet. For a typical customer, Mary will sell a hardware and software package to the customer along with a multiyear maintenance contract, typically 2, 3, or 4 years. The customer will incur a significant up-front charge for the equipment, followed by monthly charges for the maintenance plan. Mary plans to allow her customers to pay for the equipment itself over the time of the maintenance plan. Thus, if the customer gets a 3-year maintenance plan, the customer will have up to 3 years to pay for the equipment. In order to acquire its facilities and equipment, Mary's company will need to borrow money. Discuss the common situations where Mary's company is likely to make use of negotiable instruments, and in particular, the risks associated with the use of negotiable instruments.

Your written assignments must follow APA guidelines. Be sure to support your work with specific citations from this week's Learning Resources and additional scholarly sources as appropriate.

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