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20. Which financing source anally costs the most common shares creened shares dhonds Use the following information so answer questions below Revenue Cost of
20. Which financing source anally costs the most common shares creened shares dhonds Use the following information so answer questions below Revenue Cost of sales $2,000,000 (1.200,000) 800,000 Gross profit Expenses Operating expenses Finance costs Total expenses ($ 400,000) 100,000 (500,000) Profit before taxes focome tax expense 300,000 (120,000) Profit for the year $ 80,000 The company's three major sources of financing are as follows: Short-term borrowings Long-term borrowings Share capital $200,000 600,000 400,000 The company is able to obtain a 13.0% interest rate on its short-term borrowings and 11.0% on its long-te borrowings. The cost of share equity is estimated at 15.0%. PLEASE PUT ONLY ONE ANSWER IN E BLANK SPACE. The company's cost of capital is 31.The company's economic value added is Sources and Forms of Financing (15%) 32. What generates internal sources of funds? a. shareholders b. lenders C. the business itself d. venture capitalists 33. What is the matching principle? a. the process that relates current liabilities to long-term debt b. the process that relates current assets to capital assets c. the process that relates debt to total assets d. the process that relates financial needs to financing requirements 34. Which of the following is a financial need? a. rent b. risk capital c. research and development d. salaries 35. Which of the following is a factor that makes a business creditworthy? a. its number of years in business b. its industry c. its name recognition d. its character
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