(1) The concept time value of money indicates

the value of a dollar decreases over time as prices increase.

the prices of goods and services will fluctuate over time due to inflation and higher costs of production.

monetary systems tend to become more sophisticated over time.

a dollar received today is worth more than a dollar received a year from today.

(2) Money has a time value because

inflation increases the value of money over time.

money earns interest over time.

monetary systems are more automated than in the past.

a dollar received today is worth more than a dollar received yesterday.

(3) Although best used as a last resort, many small businesses find it convenient to use __________ as a short-term source of financing. Although this form of short-term debt comes with high interest rates, it provides a quick line of credit for many firms, including start-up companies who may not be able to secure bank loans.

Factoring

credit cards

commercial paper

promissory notes

(4) The first step in the financial planning process is

forecasting financial needs.

preparing financial statements.

developing budgets.

establishing financial control.

(5) The overall objective of financial planning is to

forecast the impact of technological trends.

prepare financial statements for managers.

optimize the firm's profitability.

establish budgets for financial control.