6. Diablo's Den is a very popular night club in a large metropolitan area. The club has succeeded in booking some top regional and national talent to play on the weekends. Although bands are rather costly, the club more than makes up for it in increased sales on Friday and Saturday nights. Diablo's would like to expand with a Diablo's West and a Diablo's South. The only problem is convincing a banker that it is not just a fad with young people. At this time, there is little chance that it can secure the $2.5 million that it needs to buy and remodel two new spaces. From a financial standpoint, we would say that Diablo's is a. Profitable b. Undercapitalized c. Improperly taxed d. Financially poised for growth 7. is a strategy for maintaining good cash flow by only purchasing the items the firm needs to work with within a very short period of time, in its production facility. a. Provisions b. Just-in-Time Inventory system c. Abbreviated Manufacturing system d. Hot-Off-The-Press system 8. 3/9 net 30 means: a. The customer gets a 9% discount if they pay in the first 3 days, but the trade terms are still net 30. b. The customer will be rewarded with a discount for every 3.4 order that they place with the company within 9 days. Customers gets a 3% discount If they pay in 9 days. They still owe the entire payment within 30 days. d. If the customer spends more than $30, he/she will get a 9% discount, as long as they pay the supplier what they owe in 30 days. c. 9. Alicia must put together a $900,000 financial package to purchase new equipment for Diablo's Den, a privately owned night club. As a student of business, you inform her that there are two ways she can find the financing she needs for this project. She can, a. develop cash flow strategies or organize trade credit. b. seek debt financing and/or equity financing. c organize company layoffs and sell stock. d. issue bonds or sell stock. 10. When a company borrows funds, its cost of capital is: a. Its revenues b. the tax rate it pays c. its gross profit d. the interest expense it pays