What is one of the main advantages of issuing Revenue Anticipation Notes?

Issuing Revenue Anticipation Notes (RANs) is primarily advantageous because it provides immediate cash flow solutions. These notes are short-term debt instruments used by municipalities to address temporary cash flow shortages that may arise due to the timing of revenue receipts. For example, a municipality may face a gap between the time it incurs expenses and the time it receives tax revenues or other income. By issuing RANs, the municipality can secure the necessary funds immediately, enabling it to continue operations and meet its financial obligations without disruptions.

The nature of RANs is to be repaid quickly, typically within a year, once the anticipated revenues are received. This characteristic allows municipalities to effectively manage their cash flow and maintain financial stability while waiting for incoming revenues. This immediate liquidity is critical, especially when there is a need to invest in public services or infrastructure without delay.

Other options do not capture the primary purpose of RANs. Long-term investment opportunities and lower borrowing costs are more associated with different types of financing. Increased governmental control is not a direct benefit of revenue anticipation notes. Thus, the focus on immediate cash flow solutions correctly highlights the key advantage of using RANs.