I. When lending is contracted out to a 3rd party, the equipment vendor will receive Which phrase below completes the sentence correctly?

A. title of the collateral.

B. the balance from the equipment finance firm prior to the customers down payment.

C. the full amount for the equipment up-front.

D. a series of future cash flows.

II. Which of the statements below regarding revolving CAPEX lines and operating lines of credit are correct? (Select all that apply)

A. Both revolving CAPEX facilities and operating lines of credit provide the borrower with a pre-approved limit from which they can draw any amount (up to cap).

B. A revolving CAPEX line is used to support working capital assets that fluctuate daily.

C. Both revolving CAPEX facilities and operating lines of credit appear as current liabilities on the borrowers balance sheet.

D. With a revolving CAPEX facility, borrowing limit is recouped only after a period of time when some of the principal has been repaid via installments.

III. What is the biggest difference between operating leases and capital leases?

A. Operating leases will affect the balance sheet while capital leases dont.

B. A company that uses mostly capital leases will have a balance sheet that appears really asset-light, compared to a business that uses mostly operating leases.

C. Capital leases will appear as an expense line item on the income statement, whereas operating leases do not have a lease expense associated.

D. Operating leases will appear as an expense line item on the income statement, whereas capital leases do not have a lease expense associated.

IV. What is the purpose of registering collateral in a public registry? (Select all that apply)

A. None of the above.

B. To ensure that the asset can be pledged as collateral to the same or different lender.

C. To ensure that other prospective lenders know that this company has credit outstanding.

D. To ensure that the asset in question remains in the clients possession in order to continue business operations.

VI. A General Security Agreement (GSA) is a blanket charge over all the assets of a corporation and can be used when a lender provides a revolving CAPEX facility in support of PPE acquisitions and non-current assets. True or False?

A. True

B. False